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Optivo (202014485)

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REPORT

COMPLAINT 202014485

Optivo

14 May 2021 [amended 07 July 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 refers to:
    1. The landlord’s handling of the resident’s staircasing application,
    2. The landlord’s handling of the associated complaint.

Background and summary of events

  1. The resident is the leaseholder of a shared ownership property, of which she owns 50%. The landlord owns the remaining 50%. The shared ownership leasehold agreement for this property was signed by the first occupant in 1990; the resident is not named on the original lease.
  2. In September 2017, the landlord informed the resident that the maximum monetary discount for staircasing (purchasing further shares in the property) would be £38,000. The landlord said that it would not be able to confirm the exact discount until a valuation report was completed. It confirmed that if the property was valued at approximately £200,000 and the resident wished to purchase the remaining 50% share, the discount would be £37,000.
  3. The resident made a further enquiry about staircasing on 10 June 2019 and asked if the discount had changed in the meantime. On 13 June, the landlord responded that it would provide the relevant forms and explaining that its legal team had confirmed she was not eligible for a discount as she was not the original owner of the lease.
  4. The landlord emailed the resident on 17 June 2019 attaching the necessary forms to begin her application to purchase further shares of the property. The resident responded the same day and explained that she had recently been told that she would not receive a discount despite previously being told otherwise. She said that she was not in a financial position to staircase “up” at this time. The landlord acknowledged this email the next day and advised her to contact it if she wished to purchase more of the property later.
  5. The resident sent an email to the landlord on 12 December 2019 and expressed dissatisfaction that she had not received a response to her previous email on 17 June 2019. She expressed dissatisfaction that she had been given incorrect information previously and asked the landlord to provide a further explanation. The landlord responded the same day and said that it had replied to the resident’s email, but she had not asked any other questions. It later referred the matter to its legal team for investigation and said that it would let the resident know when it received further information. 
  6. The resident emailed the landlord on 25 May 2020 to follow-up on this matter. The landlord responded on 28 May 2020 and explained that only the original person named on the lease was entitled to a staircasing discount. The resident replied and confirmed that her complaint was in regard to the fact she was told she would receive a discount and that she had relied on this information to be in a position to buy the remaining 50% of the property. She felt that given the situation, the staircasing discount should be extended to her.
  7. On 3 June 2020, the landlord confirmed that the resident would need to contact its complaints team via email to raise the complaint if she wished. It is not entirely clear when the resident raised a complaint as this information was not included in the evidence provided to this Service.
  8. The landlord emailed the resident on 17 July 2020 and apologised for the amount of time it had taken to respond to her complaint. It explained that it had discussed her concerns with its legal team and had found that there was no right to a discount on staircasing on the property. It confirmed that the original information the resident had been provided with was incorrect. It explained that as a charitable organisation, it needed to safeguard its charitable assets; as such, it was required to dispose of its assets, such as shares it held in the resident’s property, at market value, in the absence of any obligation to do otherwise.  The landlord offered the resident £100 by way of apology for the incorrect information provided. It asked the resident to confirm whether she would like to proceed with her original staircasing instruction at full open market value.
  9. The resident emailed the landlord on 12 November 2020 and expressed her dissatisfaction once more. She again expressed concern that if she had proceeded with her staircasing application in 2017, she would have received a discount, but had been told that this was not the case now. She felt this was unfair and asked the landlord to honour the discount she was originally promised.
  10. The landlord acknowledged her email on 16 November 2020 and confirmed that it would complete an investigation and respond by 20 November 2020. It emailed the resident on 20 November 2020 and explained that as a previous response and offer of £100 compensation for miscommunication was issued in July 2020, it had escalated the complaint for a formal investigation. It confirmed that the resident would receive a written response by 4 December 2020.
  11. On 24 November 2020, the landlord emailed the resident to explain that it would not be able to agree to the staircasing discount as compensation because it had received legal advice and the resident was not entitled to the discount. It said that the amounts usually considered when providing compensation would be between £50 and £250. It said that if the resident wished to pursue a legal claim for the discount, she might wish to seek legal advice. It asked the resident whether she wished to continue with her formal complaint. The resident responded the same day and confirmed that she would contact her solicitor before deciding whether to pursue the complaint.
  12. On 30 November 2020, the landlord emailed the resident to ask if she would like to proceed with the formal complaint. The resident confirmed that she wanted to proceed on the same day and said that she had not sought legal advice at this stage. The landlord confirmed that she would receive a formal response by 4 December 2020.
  13. The landlord issued its stage one response to the resident on 3 December 2020 and explained the following:
    1. It confirmed that it had spoken with its legal team and found that there was no right to a discount on staircasing for the property. It concluded that the original information the resident was provided was incorrect. It apologised for any disappointment caused and for the incorrect information it had previously provided. It explained its duties as a charitable organisation again.
    2. It offered the resident £100 as a goodwill gesture for providing incorrect information previously. It confirmed that if the resident wished to pursue a legal claim for a staircasing discount then she might wish to seek legal advice. It advised that if she remained dissatisfied with its response, she could request for her complaint to be reviewed.
  14. The resident completed a review request form on 17 January 2020 and confirmed that she wanted her complaint to be reviewed as she believed that she was entitled to a discount on staircasing at her property and had made financial decisions based on the information with which she had previously been provided. She asked the landlord to reinstate the discount she was told she was entitled to as a resolution to her complaint.
  15. The landlord acknowledged the resident’s request for review on 19 January 2021 and confirmed that it would write to the resident by 2 February 2021 with its decision.
  16. The landlord provided its final response to the resident on 1 February 2021. It explained that it had decided not to escalate the resident’s complaint for review because it had received legal advice that she did not qualify for a discount and its review panel did not have the power to grant a discount given the legal position. It explained that by bringing the internal complaints process to a close sooner, she might ask for an external independent review earlier. It explained that in light of the outcome, it was willing to increase its compensation offer from £100 to £250 in recognition of the distress and inconvenience caused.

Assessment and findings

The landlord’s handling of the resident’s staircasing application 

  1. Any dispute about the resident’s eligibility for a staircasing discount would involve the interpretation of the lease, which would ultimately be a matter for a court. The resident may wish to seek independent legal advice should she wish to pursue a legal claim. This investigation considers how the landlord handled the resident’s application for staircasing. In reaching a decision about the resident’s complaint we consider whether the landlord has kept to the law, followed proper procedure and good practice, and acted in a reasonable way. Our duty is to determine complaints by reference to what is, in this Service’s opinion, fair in all the circumstances of the case.
  2. It is not disputed that the resident was told she would be eligible for a staircasing discount by the landlord in 2017 if she wanted to purchase further shares in her property. The landlord acknowledged that it had provided the resident with incorrect information and offered £250 in recognition of the inconvenience and distress caused.
  3. It was appropriate for the landlord to seek out and rely on advice from its legal advisers. The landlord acted fairly in seeking legal advice on the matter, acknowledging its mistake, apologising to the resident, and making an offer of financial redress in recognition of the distress and inconvenience caused by the error.
  4. It is noted that there was a failure in communication between December 2019 and May 2020, and the resident had needed to follow-up with the landlord as she had not received a response as expected. The landlord did not respond to the resident as agreed in December 2019, although the resident did not actively pursue this matter as a formal complaint at this stage so was not significantly disadvantaged by this delay.

The landlord’s handling of the associated complaint

  1. The landlord’s complaint handling policy states that it will first attempt to resolve the matter outside of its complaints procedure. If this is unsuccessful, the matter can be considered as a formal complaint under its two-stage process. At stage one, the landlord should provide a response within ten working days, unless more time is required to complete an investigation. If the resident remains dissatisfied, they can escalate their complaint to the review stage (stage two) within ten working days of receiving the stage one complaint response. The landlord should then confirm whether the complaint will be escalated and the date of the review meeting within ten working days. If the landlord decides not to progress the complaint to its review stage it should write to the resident and explain the reasons why.
  2. The Ombudsman’s Complaint Handling Code states that landlords should recognise the difference between a service request (pre-complaint), survey feedback and a formal complaint and take appropriate steps to resolve the issue for residents as early as possible. It is reasonable for a landlord to attempt to resolve a complaint informally in the first instance; however, this should be quick and should not take longer than around a week, so it does not delay the complaint going through the formal process if necessary.
  3. The resident referred to the matter as a ‘complaint’ in her emails in May 2020 and was advised by the landlord to raise this through its complaints team. There is no evidence that the resident did so, although the landlord could have registered the matter as a complaint there and then given that the resident had expressed dissatisfaction with the advice provided by the landlord. Instead, after a delay, the landlord provided a response to the resident on 17 July 2020 via email and apologised for the delay in responding which was reasonable. Its response at this stage was reasonable; however, it failed to provide the resident with the relevant information about how she could escalate the complaint through its formal complaints procedure; the resident was therefore unaware of the next step to take if she remained dissatisfied, and the landlord missed the opportunity to bring the matter to a close at an earlier stage.
  4. Following this, the resident expressed her dissatisfaction about the same issues via email to the landlord’s Chief Executive on 12 November 2020. This was forwarded to the complaints team two working days later, and after a brief delay the complaints team contacted the resident on 20 November. At this stage, the resident said she did not wish to engage in the complaints procedure as she expected the landlord to agree to apply a discount to the cost of staircasing. When the landlord explained it could not do this through its complaints or compensation policy, the resident said she wished to seek legal advice on the matter first before proceeding with the complaint. Despite all of this, only 15 working days elapsed between the complaint on 12 November and the response on 3 December, and five of these days elapsed between the resident advising she wished to seek legal advice and advising the landlord that she wished to proceed with the complaint. The landlord’s response to the complaint at this point was therefore timely.
  5. The stage one complaint response was issued on 3 December 2020 in line with the landlord’s timescales at stage one. This was essentially a word-for-word replication of the informal response issued via email on 17 July 2020. This may have caused frustration to the resident as no further explanation of the matter had been provided in the interim; however, it was reasonable given that the resident had essentially repeated the same complaint as previously submitted, and the landlord’s position had not changed in the interim.
  6. The landlord took reasonable steps to manage the resident’s expectations by confirming that it would not be able to change its decision regarding her eligibility for the staircasing discount through the complaints process as this was a legal matter; however, this could have been explained when the resident initially raised her concerns in an attempt to resolve this matter sooner. It was reasonable for the landlord to deny the resident’s request for a review on 1 February 2021 as it had identified that it could not provide the outcome which the resident was seeking nor the staircasing discount she believed she was eligible for.   

Determination (decision)

  1. In accordance with paragraph 55 (b) of the Housing Ombudsman Scheme, the landlord has offered redress to the resident prior to investigation which, in the Ombudsman’s opinion, resolves the complaint about its handling of the resident’s staircasing application satisfactorily.
  2. In accordance with paragraph 54 of the Housing Ombudsman Scheme, there was service failure by the landlord in respect of its handling of the associated complaint.  

Reasons

  1. The landlord acknowledged its failure to appropriately advise the resident upon the first point of asking in 2017, sought and relied on legal advice in providing the correct information to the resident, and sought to put things right by offering a reasonable amount of financial redress and committing to learning from the outcome of the complaint.
  2. There was a delay in the landlord’s response to the complaint when it was initially raised, and it failed to advise the resident of how she could express continued dissatisfaction with its informal response.

Orders and recommendations

  1. The landlord is ordered to pay the resident £75 in recognition of the service failures identified in its complaints handling.
  2. The landlord should ensure that the £250 offered in its final response to the complaint is paid to the complainant within the next four weeks if it has not already been paid.
  3. It is recommended that the landlord considers carrying out staff training to ensure that residents are given information about the formal complaints process, including its policy to attempt to resolve the matter outside of the complaints procedure in the first instance but that a formal complaint can follow if this is unsuccessful.