Optivo (now Southern Housing) (202215116)

REPORT

COMPLAINT 202215116

Optivo (now Southern Housing)

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

The complaint is about the landlord’s handling of:
1. a leak at the resident’s property.
2. the associated complaint and request for compensation.

Background

The resident is a shared owner who owns a 35% share of her property. The resident’s lease started on 1 March 2019.
The landlord commissioned a developer to build the resident’s property with an agreement that the developer would be responsible for any defects after the properties were handed over and for a specified time. This is known as a defect liability period (‘the DLP’). The DLP ran from 3 October 2018 to 3 October 2019.
On 23 December 2021, the resident contacted her landlord to report an issue with her boiler and plumbing. The resident explained that there was a leak that was likely coming from her boiler. She also explained that some tiles were cracked which indicated a plumbing issue.
The landlord responded to the resident the next day explaining that as a leaseholder, she would generally be responsible for the internal repairs. The landlord asked the resident to let it know if she thought otherwise so it could pass her details onto its home ownership team.
On 6 January 2022, the resident informed her landlord that she wished to make a claim on the property’s building insurance. The landlord recommended the resident instruct a plumber to report on the cause of the leak, take photographic evidence and obtain two separate contractor quotes.
The resident’s plumber attended her property and produced a report on 13 January 2022. They identified the following:
1. an unconnected bath overflow pipe;
2. an incorrectly fitted condenser trap relating to the boiler;
3. mould and condensation behind the toilet cistern;
4. damp creeping up the walls;
5. a copper pipe being held up by a single nail.
The resident made two claims on her building’s insurance for the leak in the kitchen and the damage in her bathroom in January 2022. The resident was charged £500 by the building’s insurance company to cover the excesses on the two claims.
On 2 April 2022, the resident contacted the landlord to request reimbursement of the insurance excesses. The landlord passed the request to its homeownership team on 8 April 2022.
The resident contacted the landlord on 4 May 2022 requesting it consider the complaint formally. She complained that her property had been built poorly resulting in the leak and the damage. The resident sought compensation and complained of poor customer service. She mentioned the landlord’s handling of the defects had caused inconvenience, stress, and worry.
The landlord escalated the resident’s concerns to a formal complaint on 31 May 2022. The resident clarified with the landlord the day later that she wanted £14,500 in compensation. This was to cover the alleged defects in the property, the stress caused to her dealing with the insurance claim, the alleged poor customer service from the landlord, and the insurance excesses.
The landlord stated in its formal response on 30 June 2022 that:
1. It was sorry the resident was unhappy with the quality of the build of her home.
2. At the end of the defect period when the property was inspected there were no leaks or issues identified with the plumbing.
3. It had advised the resident on 6 January 2022 to instruct a plumber to investigate the cause of the leaks and of the option of making an insurance claim to cover the cost of repairing the damage.
4. The resident needed to complete a liability insurance claim form if she believed the landlord caused her stress through negligence.
5. It was sorry the resident was unhappy with the customer service she received, and it was improving its customer service by recruiting more staff.
6. It provided additional information and training relating to leaks and shared ownership properties to staff.
7. It was improving its communication by centralising the way it logs and monitors requests for action.
8. It agreed to reimburse the resident £500 for the insurance excesses as a goodwill gesture and offered a further £200 for the delays she experienced.
The resident requested a review of the landlord’s decision on 3 July 2022 on the basis that she felt the offer of compensation was too low. The resident submitted a review request form to her landlord on 18 July 2022. The resident was unable to attend the review because it was during work time.
The landlord held a meeting on 15 September 2022 to review the resident’s complaint and reported the outcome on 30 September 2022. The landlord stated:
1. The level of communication it offered to the resident during the disrepair claim was not to its expected standard and this contributed to the leak taking longer to resolve.
2. It accepted there were several leaks in the resident’s bathroom area.
3. After the resident made two insurance claims the repairs were completed, and the bathroom area was made free of leaks.
4. It paid £500 to cover the excesses on the two insurance claims which was the resident’s responsibility.
5. It apologised for the inconvenience and upset caused to the resident in dealing with this repair and it offered £200 in compensation for its lack of communication.
The resident was unhappy with the landlord’s response and referred her complaint to the Ombudsman. She felt the compensation of £200 was inadequate given the living conditions at the property and having to move out of her property for six months and take unpaid time away from work.

Assessment and findings

The landlord’s handling of the alleged defects

The resident was unhappy with the standard of construction of her property and believed that defective construction caused the leak. She requested £5000 for the defects she alleged with the construction of the property. There is no evidence to demonstrate that defective construction caused the leaks. Specifically, the property was outside the defective liability period (“the DLP”) and neither the resident nor landlord had identified or reported any defects at the initial and final inspections. The plumber’s report indicated that an unconnected bath overflow caused the water damage however this was not the landlord’s responsibility.

The landlord’s handling of the leak and compensation

When the resident contacted her landlord in December 2021 to report an issue with her boiler and plumbing, the landlord correctly suggested that these issues would be the responsibility of the resident. This is because clause 3.4 of the resident’s lease states leaseholders are responsible for pipes, drains, and gas apparatus in their properties. By that time, the resident was outside the DLP. There is no evidence that the landlord was responsible as it did not build the property. Nor had it taken responsibility for the build, save for obtaining a warranty for the DLP.
However, the landlord should have taken responsibility for making a building insurance claim for any damage at the time the resident reported. This is because clause 5.2 of the resident’s lease requires this and it would have been obvious from the resident’s report that the damage may have qualified for an insurance claim.
The resident complained that the landlord had not informed her that she could make an insurance claim when she made contact in December 2021. However, this caused no detriment to the resident as she was aware in January 2022, shortly after the leak, that she could make a claim directly with the building insurer.
The insurance claims were settled so that the damage to the bathroom tiles, walls, and the carpet outside the bathroom were repaired or replaced. The evidence shows that the resident obtained redress for the issues that the plumber identified in their report.
The landlord offered and paid the resident £500 to reimburse her for the cost of the excesses on the two insurance claims she made. The Ombudsman is of the view that this is reasonable redress for the landlord’s failure to make the claims. This is because the landlord was not responsible for the leak, but it made an offer to acknowledge the difficulties experienced by the resident following the discovery of the leak.
The resident informed the landlord on 4 May 2022 that she had experienced inconvenience, stress, and worry from the delays and requested compensation for six months. She claimed £8000 for stress including time off work. The landlord informed the resident in June 2022 that she could make a claim for any stress caused by the landlord’s negligence through an insurance claim.
Whilst it was not unreasonable for the landlord to direct the resident to its indemnity insurer, the Ombudsman does expect landlords to always consider discretionary compensation for distress and inconvenience. This would be payable where, and only where, the landlord’s act or omission had caused the resident’s distress and inconvenience. In this case, the only error identified by the Ombudsman was the delay in offering to make a claim to the insurer. The adverse effect of this would have been minimal.
The Ombudsman is not able to find that the landlord was responsible for the defects that the resident raised outside the DLP. It would be for the resident to establish fault on the part of the developer, builders, or sub-contractors. In any event, this may be best dealt with by the New Homes Ombudsman against the developer – who is a member of the New Homes Quality Code.
In addition, there is no evidence to demonstrate any loss of income to the amount claimed or that such a large financial loss could not have been avoided.
The resident moved into temporary accommodation whilst repairs were completed and the insurer covered the cost of rent and some bills at the new address. There is no evidence of loss caused by the landlord so the offer to cover the insurance excesses was a proportionate and reasonable step for the landlord to take.
As the landlord was not responsible for the leak and the consequent damage it was under no obligation to pay the resident £14,000 for the alleged defects in construction and stress. It was reasonable of it to make the offer it did to acknowledge the stress and inconvenience caused by its communication failures. It was also appropriate for the landlord to direct the resident to its insurer. The indemnity insurer would be able to consider a claim for any ill health and loss of income caused to the resident by the leaks and having to move property during the repair works.

Complaint handling

The resident raised a complaint with her landlord on 4 May 2022.The landlord only acknowledged the resident’s complaint formally on 31 May 2022 when it promised to respond within 10 working days. There is no evidence of the landlord responding within this time.The landlord indicated that it responded to the resident’s complaint on30 June 2022. This was unreasonable. This is because the landlord’s complaints resolution procedure requires complaints to be acknowledged within 3 working days and for a full response to be given within 10 working days.
The landlord’s complaint procedure required the landlord to inform the resident of her right to submit a written statement to the review panel when she informed her landlord that she could not attend in person. Although there is no evidence the landlord informed the resident of this right there is no evidence either this placed the resident at a disadvantage. This is because the resident had already provided the landlord with evidence and information as part of her complaint.
The landlord accepted, as part of its complaint response, that it failed to communicate effectively and there were delays. To recognise this, it offered £200.
The Ombudsman’s dispute resolution principles set out our approach to providing remedies. The three principles are: be fair, put things right, and learn from outcomes. This involves deciding if the landlord recognised all that went wrong and whether it took appropriate and proportionate steps to put things right with the resident.
The Ombudsman is of the opinion that the compensation of £200 offered for the failures in complaint handling was reasonable redress. This is because this amount is reflective of the award the Ombudsman would make given the failures and considering the distress and inconvenience caused to the resident.

Determination

In accordance with paragraph 53(b) of the Scheme, the landlord has offered redress to the resident prior to the Ombudsman’s investigation which, in the Ombudsman’s opinion, resolves the complaint about the water leak satisfactorily.
In accordance with paragraph 53(b) of the Scheme, the landlord has offered redress to the resident prior to the Ombudsman’s investigation which, in the Ombudsman’s opinion, resolves the complaint about how the landlord handled the associated complaint satisfactorily.

Recommendations

It is recommended that the landlord pay the resident the sum of £200 within 28 days of the date of this determination.
It is recommended that the landlord review the information available to its staff on claims made by leaseholders, and ensure it reviews its processes to support residents by making building insurance claims on residents’ behalf.
It is recommended that the landlord reviews the communication it provides to residents who are unable to attend review panel meetings. This is to ensure residents are aware of their right to provide written statements.