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One Housing Group Limited (202213037)

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REPORT

COMPLAINT 202213037

One Housing Group Limited

31 August 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 sales process for the resident’s property.

Background

  1. The resident was a shared ownership leaseholder of the landlord and sold the property on 18 March 2022. The property is a flat.
  2. The resident expressed interest in selling the property in August 2020. The property was valued at £695,000 on 8 January 2021. The property was listed by the landlord on 3 March 2021 and the landlord confirmed the resident could advertise the property on the open market on 19 May 2021. A second valuation was completed on 9 July 2021, as the resident had an interested buyer. The resident requested a desktop valuation on 5 January 2022, which was completed on 23 February 2022, valuing the property at £710,000. The sale was completed on 18 March 2022.
  3. The resident raised a complaint on 1 April 2022 as he was dissatisfied with the delay in instructing the valuation, which he thought caused the increased value of the property. He had to absorb the difference in value as the buyer was unable to increase their mortgage offer. He also raised concerns with the landlord’s unclear resale process, poor communication, and the limited number of surveyors to choose from.
  4. In the landlord’s stage one response, it said valuations only last for 3 months and the most recent valuation deemed the property value was £710,000. It stated it issued the management pack on 4 December 2021 and any further enquires raised by the buyers could prevent the sale from completing within the timeframe. It acknowledged and apologised for the delay in its communication during the sale of the property. It said it had experienced staff shortages, high demand for its services due to the pandemic, and recruitment issues. It offered £100 compensation.
  5. The resident escalated his complaint on 13 May 2022. He said the landlord failed to promptly respond so he experienced severe delays throughout the sales process. He also said the landlord did not engage with the proposed solutions regarding the increased valuation. He requested additional compensation for the £15,000 difference in the valuation, £4800 additional rent costs incurred, and the £1000 additional stamp duty incurred.
  6. In the landlord’s final response, it took accountability for the delays and identified where its communication failed to meet its response timeframes. It said that a new valuation was a legal requirement to progress the sale. It would typically query a valuation if it did not meet market trends, but house prices in the resident’s area had increased more than average since the first COVID-19 lockdown. It explained the lessons learned from the complaint and the steps it had taken to improve its service, including further training, additional recruitment and improving its resources available to residents regarding resales and staircasing. It offered £500 compensation for the delayed services, £360 for the valuation and desktop surveys and £750 for the additional stamp duty incurred.
  7. In the resident’s complaint to this service, he said he remained dissatisfied as the landlord had failed to act in line with its obligations during the sales process, uphold the lease agreement or clearly communicate. There was a delay in obtaining the desktop valuation and due to changes in the property market during that period, the property value increased, and the resident had to absorb the difference. He wanted compensation for the difference in the house price sale and the stamp duty increase.

Assessment and findings

  1. The landlord’s resales guide states that in order to sell the property, a valuation must be completed by an independent member of the Royal Institute of Chartered Surveyors (RICS). The landlord will then market the property during the nomination period, following which, the resident is able to sell the property on the open market. The landlord’s resale policy states that it will maintain regular contact with buyers, sellers, and the landlord’s solicitors, to ensure sales progress to completion. Its resales procedure outlines timeframes for responding to different stages of the resale process.
  2. The resident’s property was initially valued on 11 January 2021 at £695,000 and the landlord explained that the valuation was only valid for 3 months. The resident confirmed he wanted to proceed with the sale on 7 February 2021 and the landlord informed him of the required information to list the property for sale. The resident sent the information on 26 February 2021 and the landlord listed the property on 3 March 2021, which slightly exceeded its 48-hour timeframe outlined in its sales and marketing manual.
  3. On 7 February 2021, the landlord told the resident there would be an 8-week nomination period. The resident asked the landlord whether there had been any interest in the property on 27 April 2021 and said he wanted to advertise the property with an estate agent. He subsequently chased the landlord on 4 May 2021 and 18 May 2021. The landlord confirmed the resident could advertise the property on the open market on 18 May 2021. The landlord’s failure to respond to the resident’s queries somewhat delayed the sales process and it was appropriate that it acknowledged this delay in its complaint response.
  4. The landlord advised the resident on 1 July 2021 that the surveyor had retired and as the valuation had expired, a second valuation was required. Although this would have been inconvenient to the resident, the circumstances were outside of the landlord’s control. The second valuation was completed on 12 July 2021, which valued the property at £695,000.
  5. In both stages of his complaint, the resident raised concerns that only one surveyor was viable to use for the second valuation from the landlord’s preapproved list. There is no evidence the resident specifically raised concerns at the time, so the landlord did not have the opportunity to resolve the issue. However, it was unreasonable that the landlord did not explicitly address the resident’s concerns in its complaint response. Regardless, this service is unable to determine whether the resident being able to use a different surveyor would have impacted the valuation or the sale process.
  6. The resident was dissatisfied that the landlord declined to use the surveyor he initially requested. In its complaint response, the landlord said its policy changed in September 2021 so residents could select their own surveyor for the landlord to approve, rather than choosing from a pre-approved list provided. Although it is recognised that the resident was frustrated the landlord did not inform him of the policy change until June 2022, as the valuation was completed in July 2021, the landlord acted in line with its policy at the time and there was no detrimental impact to the resident.
  7. The resident advised the landlord he had found a buyer for the property on 8 September 2021. The resident’s solicitor requested the management pack on 13 September 2021 and the landlord issued it on 4 October 2021, which slightly exceeded its 10-working day timeframe. It was appropriate that the landlord acknowledged this delay and informed that it would take steps to improve its service by designating a staff member to collate and issue the management packs.
  8. The resident asked the landlord to instruct a desktop valuation on 5 January 2022, 6 January 2022, and 15 February 2022. The valuation was completed on 23 February 2022 and valued the property at £710,000. The landlord’s sales and marketing manual states that it should acknowledge a valuation instruction within 24 hours, so there was an unreasonable delay. It is evident that the landlord’s delay in responding to the resident’s request to arrange a further valuation caused additional stress and inconvenience.
  9. The resident raised concerns that the delay in arranging the valuation, led to the £15,000 increase in the value of the property. Given the delays in arranging the valuation, the resident’s solicitor asked the landlord to liaise with the valuer, accept the initial valuation, or obtain a valuation to reflect the value on 5 January 2022, when the valuation was initially requested. However, the landlord said that staircasing prior to the sale of the property had to proceed at the most recent valuation. It is recognised that the increased valuation had a significant financial impact on the resident, as he had to absorb the cost due to the buyers not being able to increase their offer.
  10. Although the landlord failed to adhere to its response timeframe, the Ombudsman is unable to determine whether the delay in arranging the valuation was the sole reason for the increased value. Other factors can lead to fluctuations in property valuations, such as changes in market trends, as stated by the landlord in its complaint response. As there was a 7-month period between the valuations, there is not sufficient evidence to confirm that the 1-month delay caused by the landlord resulted in the £15,000 increase. Furthermore, as the surveyor is a member of RICS, the resident could have raised a dispute or complaint about the valuation through RICS. This would have been the appropriate body to challenge any dissatisfaction with the valuation.
  11. This service would therefore not be best placed or have the expertise to consider the validity of the valuation. On this basis, although there is evidence of failing on the landlord’s behalf, compensation will be considered for distress and inconvenience, rather than tangible losses incurred due to the increased valuation of the property.
  12. There were ongoing discussions between the landlord and the resident’s solicitor regarding the buyer’s queries between 9 December 2021 and 28 February 2022. The landlord was in regular communication with the resident’s solicitor and responded within reasonable timeframes, so there is no evidence to suggest it caused any unreasonable delays. Furthermore, the sale of properties can be delayed for a wide variety of reasons, and it is not possible to say with any certainty that the resident would have sold the property at an earlier date without the ongoing correspondence.
  13. Overall, there is evidence of failing by the landlord in its handling of the sale of the resident’s property, as it failed to act in line with its response timeframes. In line with this service’s dispute resolution principles, the landlord should be fair, put things right, and learn from outcomes. In this case, the landlord has demonstrated that it has reflected on its handling of the resale of the resident’s property and identified its failings and areas of improvement within its stage two complaint response. It is also positive to note that the landlord has taken significant steps of learning including various additional staff training, improvements to its home purchasing processes and procedures, and steps to improve its customer-facing information. It has also sought to resolve the underlying staff shortage issue which resulted in its failure to respond within reasonable timeframes, by completing additional recruitment.
  14. The landlord offered £1,610 compensation comprised of £500 for its delayed services, £360 reimbursement for the valuation and desktop valuation and £750 to cover the additional stamp duty. The resident has advised this service that he only sought compensation for the costs incurred due to the increased valuation and additional stamp duty.
  15. As stated above, this service is unable to assess the tangible loss caused by the change in valuation of the property. However, it is evident that the delays in the landlord’s communication caused additional time, trouble, and inconvenience to the resident, which have been considered. The landlord’s compensation offer exceeded what would typically be ordered by this service, in line with our remedies guidance, which states in cases where the resident has been adversely affected, compensation of £100-£600 is appropriate. The landlord has therefore reasonably redressed the complaint.

Determination

  1. In accordance with paragraph 53(b) of the Housing Ombudsman Scheme, the landlord has made an offer of redress in relation to its handling of the sales process for the resident’s property, which, in the Ombudsman’s opinion, resolves the complaint satisfactorily.

Recommendations

  1. If it has not done so already, it is recommended that the landlord pays the resident £1610, as offered in its stage two response.