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Notting Hill Genesis (202213890)

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REPORT

COMPLAINT 202213890

Notting Hill Genesis

26 April 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:
    1. The landlord’s handling of a shared ownership purchase, including the advertisement of the property on the landlord’s resale website.
    2. The level of communication and information provided by the landlord on payments and costs if the property was sold on the open market.

Background

  1. The resident had a shared ownership lease of a property with the landlord since early 2020. The landlord is a registered provider for social housing. The property is a one-bedroom flat. The resident owned 35% of the leasehold share. The remaining 65% of the leasehold share was owned by the landlord.
  2. On 10 November 2020 the resident submitted a resale instruction form to the landlord which was processed in a timely manner. Initially the landlord made errors in the fees published in relation to monthly costs when advertising the sale of the property on its resale platform. It showed inflated costs that made the property unaffordable for those looking for shared ownership properties. The resident believes that these errors resulted in the property being disadvantaged and losing potential buyers. The landlord corrected the errors as soon as they came to its attention, after several emails from the resident. The landlord offered the resident £200 for surveyor’s fees as compensation. The resident accepted this offer.
  3. The landlord subsequently gave the resident permission to advertise on the open market early as there had not been much interest in the property. The open market permission letter which was sent to the resident included information about selling on the open market. The information leaflet set out at paragraph six the fees that would be payable if a buyer was secured on the open market. A diagram set out that the resident would be liable to pay their own solicitors fees, valuation fees, estate agency fees and any stamp duty payable. The landlord continued to advertise the property on its resale website alongside that of the independent estate agents.
  4. The resident subsequently expressed his concerns to the landlord about the lack of potential buyers. He said he felt it was not being proactive in its approach to selling the property. He said he was tense and worried that with the stamp duty coming back in, it might create more challenges. In June 2021 the resident explained he was under financial strain, especially as his job and salary had changed. The resident expressed frustration about the lack of communication from the landlord. The landlord explained there had been a lack of interest and that the resident should consider local estate agents. It gave him details of the viewing of the property on its website (over 6,000 searches and over 800; however, only twelve applicants registered an interest of which two agreed to view.)
  5. On 12 April 2022, the resident secured a 100% sale of his property through an independent letting’s agent. As a consequence of this sale, the resident would have to simultaneously staircase to 100% using the sale proceeds to purchase the additional 65% share and pay the requisite stamp duty. Furthermore, given that a sale was secured at the full market value, the resident would have to pay the estate agent’s fees based on the full sale price.
  6. In response to the resident’s complaint, the main points made by the landlord were:
    1. There had been errors on the initial property sale advert which were rectified as soon as they were brought to its attention.
    2. As compensation, the landlord agreed to pay £200 for an updated valuation report, which the resident would usually be liable for.
    3. The open market permission letter provided the necessary information regarding the fees payable if a sale was made on the open market.
    4. The landlord acknowledged the resident’s frustration and financial implications but said it did not consider it appropriate to contribute towards the estate agent’s fees as the resident was made fully aware of the financial implications of selling the property on the open market.

Assessment and findings

The handling of a shared ownership purchase, including the advertisement of the property on the landlord’s resale website

  1. The landlord recognised in its complaint responses that errors were made with the initial marketing of the property, but these were rectified immediately once identified and compensation was awarded. The landlord’s offer of £200 for surveyor fees was accepted by the resident as compensation.
  2. It is clear the property remained on the market for a fairly long time after the errors were corrected; the resident has not disputed the viewing figures of the property on the landlord’s website. It cannot be said with any certainty that these errors had any impact on the sale of the property given the eventual sale did not happen until a very long time after the errors were corrected.
  3. In conclusion, the landlord recognised that there was an error and corrected it. The Ombudsman considers that the remedy offered by the landlord was proportionate to the impact on him. There is no evidence that suggests the service provided by the landlord has markedly failed to meet service standards or that error affected the saleability of the property. The Ombudsman considers that the redress offered to the resident was adequate for the impact on him as a result of the initial errors in the listing.

The level of communication and information provided by the landlord on payments and costs if the property was sold on the open market

  1. Although there is no evidence of the discussion of liability for fees in the email communication between the resident and the landlord, it is reasonable to assume that the resident would have known about fees that would be payable. Also, the Ombudsman notes that it is reasonable to assume that the resident would have sought legal advice as this is about the sale of their property.
  2. The resident was granted open market permission to advertise the property sooner than he was entitled to under the terms of the lease. The information leaflet sent with the open market permission letter set out the fees that would be payable if a buyer was secured on the open market; there was also a clear diagram setting those fees including the stamp duty payable.
  3. The information leaflet also referred the resident to the landlord’s website where its ‘Selling Your Home’ page says that residents will be liable to pay fees to an estate agent, if they use one. The ‘Staircasing’ page says “If you did not pay stamp duty on the full value of your home, you may need to pay extra stamp duty. We cannot help with questions about stamp duty. Your solicitor will answer these for you.” The resident would have had further access to information about the fees payable on the landlord’s website.
  4. The lease also says on page nine that the leaseholder is liable to pay all costs, charges, and expenses (including solicitors’ and surveyors costs reasonably incurred by the landlord. This includes the costs incurred by the landlord including any professional fees and any stamp duty. It is reasonable to presume that the resident would have had a legal representative before entering this agreement. It is also reasonable to assume that he would have received advice regarding the terms, conditions and covenants contained within it.
  5. Although the Ombudsman recognises that the resident suffers from dyslexia, the information in relation to fees was presented in several different formats available to the resident to view and question if necessary. The Ombudsman finds no maladministration regarding the fees payable.

Determination

  1. In accordance with paragraph 53(b) of the Housing Ombudsman Scheme, and in the Ombudsman’s opinion, there was reasonable redress offered by the landlord in respect of its handling of the shared ownership purchase, including the advertisement of the property on the landlord’s resale website.
  2. In accordance with paragraph 52 of the Housing Ombudsman Scheme there was no maladministration by the landlord in respect of the level of communication and information provided by it on payments and costs if the property was sold on the open market.

Recommendations

  1. The landlord should consider retraining staff on the importance of ensuring the correct information is included on any marketing to prevent such errors occurring again.