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Notting Hill Genesis (202008834)

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REPORT

COMPLAINT 202008834

Notting Hill Genesis

21 April 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

  1. The complaint concerns the amount of compensation offered by the landlord following a leak to the property and in particular, the amount of compensation paid for:

a.     financial loss, and;

b.     lack of communication and lack of customer service.

 

Background

  1. The leaseholder is a shared ownership leaseholder, and the lease was signed between her and landlord on 28 March 2019.  A leak occurred on 20 April 2019.  The landlord’s contractor accepted responsibility for this under its warranty policy.  The leaseholder moved out of the property to stay with a friend who lived several miles away whilst the work was taking place. The work was completed by the contractor and the leaseholder moved back into the property approximately four months later, in September 2019.

 

Summary of Events

  1. On 2 May 2019, the leaseholder submitted a complaint to the landlord.  She outlined that when she initially contacted the landlord, it failed to understand who had responsibility for the leak. She said that there was a lack of communication from the landlord, and that the water was coming through various electrical points and had caused extensive damage, but the landlord did not consider suitable decant accommodation for her. The landlord acknowledged the complaint on 8 May 2019.

 

  1. Although it would appear that there were ongoing phone conversations and site meetings between the landlord and/or the leaseholder and the contractor, it has not provided this Service with any further evidence as to how it was dealing with the formal complaint at the time.

 

  1. The next correspondence provided by the landlord is an internal email chain from 12 – 27 March 2020.  This states that as soon as the landlord receives a letter of claim from the leaseholder, it will be dealt with as an insurance claim rather that a customer service complaint.

 

  1. On 17 April 2020 the leaseholder submitted a table outlining her compensation claim.  The claim was for a total of £6498.38.  This included compensation for her mortgage and council tax payments; broadband and gym membership, and; time off work for onsite visits and travel costs for onsite visits. 

 

  1. On 8 May 2020, an internal email was sent which stated that the leaseholder had chosen to vacate her flat and that the landlord had done all in its power and acted as soon as it could to make sure the cause of the leak had been identified and repaired, and therefore could not be held liable for negligence under the Defective Premises Act.  It went on to advise that the claim should have been directed to the contractor.  Furthermore, the email stated that any consequential financial loss should be directed to the contractor as it was responsible for the leak. Therefore, the right course of action was for the landlord to re-direct the leaseholder to the contractor and for her to make her own private public liability claim against the contractor’s public liability policy.  It noted that the landlord had already agreed to suspend the service charge for the period of un-occupancy.  It also advised that there was no financial loss in terms of mortgage payments as these would have been due whether or not the leaseholder was occupying the property.

 

  1. The landlord provided a stage one response to the formal complaint on 27 May 2020.  It broke the matter down into three elements: lack of customer care; the handling of the formal complaint, and; the compensation claim.

 

  1. In relation to the lack of customer care, the landlord stated it was very disappointed in its performance. It noted that not offering alternative accommodation to the leaseholder was probably as a result of her already making her own arrangements but nevertheless was poor judgement on its part.  It acknowledged that there was poor communication and a lack of support for the leaseholder.  In relation to the formal complaint handling, it noted that this was poorly managed and there was a further lack of communication in relation to this. It offered its sincere apologies and £500 compensation for its failures (£250 for customer care and £250 for formal complaint handling).

 

  1. In relation to the compensation claim, the landlord acknowledged the emotional stress the leaseholder had gone through and said that it was sincerely sorry for the various costs incurred by her. However, it stated that it had acted immediately to engage the contractor and therefore was not liable or negligent.  It noted that its compensation policy did not allow it to pay compensation for loss of earnings and did not pay compensation solely for defects in a new home.  Nevertheless, in recognition of the stress suffered, it offered to write off the rent and service charge for the four-month period.  This equated to £2973.84 and together with the £500 also offered, gave a final goodwill gesture of £3473.84.  The landlord advised the leaseholder that she would need to submit her financial loss claim to the contractor as a private public liability claim.

 

  1. The leaseholder responded on 31 May 2020.  She expressed her gratitude that the landlord had provided a very thorough response and that it now recognised what a difficult experience it had been for her.  However, in relation to the compensation claim she highlighted that the contract for the work was between the landlord and the contractor and not directly with her.  She also referred to a conversation between herself, the landlord and the contractor in which the contactor said it would re-coup any compensation costs from the plumbing sub-contractor that the main contractor had used.  She noted that whilst this was understandable, it had nothing to do with her.  She expressed her view that due to the fact that the contract was between the landlord and the contractor, it was the landlord’s responsibility to pursue the compensation.

 

  1. Before taking the matter to stage two of its complaint procedure, the landlord provided a further response to the leaseholder dated 24 June 2020.  Whilst this letter reiterated the apologies and acknowledgement of failure from the stage one response, it went on to say that a senior manager had now had further input and it also informed the leaseholder that several recommendations had been made to improve customer service and accountability.  However, the compensation offer remained the same.

 

  1. In October 2020 the leaseholder asked to escalate the complaint to stage two.  Following a telephone conversation with the leaseholder, the stage two response was provided on 4 December 2020.  The landlord noted that it had discussed matters with its insurance team and found that the landlord had no liability under the Defective Premises Act. The contractor assumed responsibility and any liability claim would have to be completed by the leaseholder and she should seek further legal advice on this.  It also reiterated that the leaseholder had not suffered any financial loss in relation to her mortgage payments as they would be due regardless of whether she was in the property or not.

 

  1. The letter went on to say that its contractor had discussed the liability claim with its insurers who believed the claim to be excessive and that the contractor was not lawfully responsible for the costs the leaseholder was seeking.

 

  1. In recognition of further service failure in customer care, the landlord offered an additional sum of £625.69.  This took the offer for customer care/complaint handling failures to £1125 plus the original £2973.84 rent and service charge refund, totalling £4099.53.  In addition, the contractor offered a further £750 goodwill gesture.

 

  1. Although this was the end of the formal complaint procedure, on 19 March 2021, the contractor increased its gesture of goodwill from £750 to £1000.

 

Assessment

  1. Assessing the contractor’s actions or any offer of compensation made by the contractor is not something that this Service can assess or make any determination on.  The contractor is not a member landlord and therefore not a member of the Ombudsman Scheme.  This Scheme can only assess and determine on the actions of the landlord.

 

  1. The relationship between the landlord and the leaseholder is governed by the lease.  The lease states at clause 6.2 that the landlord shall not be liable for any damage suffered by the leaseholder “…. through any defect …” The situation in this case is complicated by the fact that the property was still under warranty with the contractor.  The matter in question here is whether or not the landlord, despite the fact the contractor accepted responsibility for the defect, has any obligation to compensate the leaseholder for her mortgage payments and lost earnings amongst other claimed losses. To do this the Ombudsman would have to establish that the amounts claimed constituted an actual loss to the leaseholder and if so, that the landlord was liable for these losses.

 

  1. Both the landlord and its contractors have sought advice from insurance experts who say the amounts claimed do not constitute a loss as, for example, the mortgage and council tax would have to be paid regardless.    Both have obtained advice that they are not liable for such losses.

 

  1. It is not within this Service’s authority to make a legally binding ruling as to whether the amounts claimed are in fact losses to the leaseholder, nor who if anyone is responsible for compensating any potential loss. This is a matter that would have to be determined either by a court, or through submitting a claim against professional liability insurance.  The leaseholder is advised to seek independent legal advice on this matter.  This is in line with paragraph 39(i) of The Scheme which states that the Ombudsman will not investigate matters …where the Ombudsman considers it …. More effective to seek a remedy through the courts …

 

  1. This Service can however assess how the landlord handled the formal complaint and how it compensated the resident for any failings in customer service or complaint handling. In identifying whether there has been maladministration the Ombudsman considers both the events which initially prompted a complaint and the landlord’s response to those events through the operation of its complaints procedure. The extent to which a landlord has recognised and addressed any shortcomings and the appropriateness of any steps taken to offer redress are therefore as relevant as the original mistake or service failure. The Ombudsman will not make a finding of maladministration where the landlord has fully acknowledged any failings and taken reasonable steps to offer redress.

 

  1. The landlord, through the complaints procedure, has been open and upfront about its failures in service and its disappointment in its performance.  It has offered its sincere apologies and put in place improvements to service to ensure better communication and support for leaseholders.  It has acknowledged the stress caused and the effect of its poor performance on the leaseholder.  This shows that the landlord carried out a thorough review; acknowledged its failings and learnt from errors.  This is in line with the Ombudsman’s dispute resolution principles to be fair; put things right and learn from outcomes.  It is noted that apart from the disagreement in relation to compensation for loss, the leaseholder expressed her gratitude for the way the landlord handled the formal complaint (at the later stages).

 

  1. The landlord has a compensation policy which states that it will not pay compensation to a resident solely because there is a defect in a new property although it will consider compensation on a case by case basis for inconvenience and distress.  In this case, the landlord offered the leaseholder a total of £4099.53.  To put this in context, the Ombudsman’s remedies guidance refers to compensation awards of £750 and above for severe maladministration that has had a severe long-term impact on the complainant. Whilst there is no doubt that the events in this case were distressing and stressful to the leaseholder, the sum awarded is in excess of the types of award usually ordered by the Ombudsman.

 

Determination

  1. In accordance with paragraph 39(i) of the Scheme, the complaint regarding financial loss to the leaseholder is outside of the Ombudsman’s jurisdiction.

 

  1. In accordance with paragraph 55 of the Scheme, the landlord has offered sufficient redress to resolve the complaint of poor customer service and failure in handling the formal complaint.

 

Reasons

  1. The landlord provided a reasonable response to the complaint raised, acknowledged its failings and offered a total of £4099, which is some degrees above the compensation orders generally made by this Service.