Orbit Group Limited (202228138)

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REPORT

COMPLAINT 202228138

Orbit Group Limited

25 March 2024

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 landlord’s handling of:
1. The resident’s request to staircase to 100% ownership of the property.
2. The related complaint.

Background

The resident and Mr X were shared ownership leaseholders of the landlord buying 45% of the property from it on 11 December 2014. The property is a 3-bedroom house.
The landlord is a housing association and was the freeholder of the property.
The landlord has no vulnerabilities recorded for the resident.

The landlord’s policies

The landlord’s homeownership policy states when a shared owner has lived in the home for a certain length of time, they can buy more shares in the property enabling them to own a greater proportion of the home. This is known as staircasing. The greater the share they buy in the property, the less rent they will pay to it; if they staircase to 100%, they will own their home outright and will no longer pay rent.
Schedule 5 of the lease echoes that the leaseholder may serve notice in writing on the landlord stating the portioned percentage he proposes to acquire.
The landlord’s home ownership procedure states for staircasing, applicants must submit an intention to staircase form, a valuation completed by a RICS-qualified valuer and the administration fee to the landlord.
The landlord operates a 2 stage complaints process. Its complaints policy states it will acknowledge a complaint within 5 working days from receipt and will provide a stage 1 complaint response within 10 working days from acknowledgement of the complaint.
Its policy states that at stage 2, it will provide a review response within 20 working days from receipt of a complaint. This timescale can be extended by 10 working days but the reason for this extension will be discussed with the resident.

Summary of events

In December 2021, the resident sent the landlord a signed ‘intention to staircase’ form requesting to staircase to 100% ownership of the property. The landlord’s records show it received the form on 20 December 2021. The landlord forwarded this to its home ownership team on 21 December 2021.
On 26 January 2022, the resident sent the signed ‘proceed’ form to the landlord in relation to the staircasing request.
On 3 February 2022, the resident sent an email to the landlord asking it to confirm receipt of the form. On 4 February 2022, the landlord acknowledged receipt of the form and told the resident it would instruct its solicitors that day.
On 21 February 2022, the resident’s solicitor contacted the landlord advising they were acting on behalf of the resident in connection with a transfer of equity of the above property into his sole name. They asked for details of requirements and fees in order that their client’s transfer of equity into his sole name could be completed.
The timeline the landlord provided to this Service indicates it instructed its solicitors in relation to the resident’s staircasing request on 22 February 2022.
On 22 February 2022, the landlord asked the resident to ask his valuer to extend the valuation as this was due to expire on 8 March 2022 as this was needed to be valid at the time of completion. On 14 March 2022, the resident sent the landlord the updated valuation.
On 28 March 2022, the resident contacted the landlord’s homeownership officer (HO) advising that his solicitors had been informed by its solicitors that the transfer of equity was outside the scope of the staircasing transaction and that he should contact the landlord directly for its consent after which he would need to re-apply in his sole name.
On 29 March 2022, the landlord told the resident that the lender was unlikely to proceed with the mortgage offer in his sole name if the property was still owned jointly. It said this was why the transfer of equity should complete prior to staircasing.
On the same date the resident told the landlord that his mortgage lender had given consent for the transfer into his sole name and had provided him with a mortgage offer. He attached the mortgage offer referred to.
On 22 April 2022, the resident emailed the HO asking that they call him to discuss the staircasing and transfer of equity process.
On 27 April 2022, the resident emailed the HO officer saying he had tried to call them on Friday but spoke to a colleague who “was confused” as to why he had been told by the landlord that he could not do a transfer of equity and staircase 100% simultaneously. The resident reiterated his request for the landlord’s consent for the transfer of equity so that he could also staircase 100% at the same time. He said the process was being held up due to the landlord not giving him consent to do this.
On 27 April 2022, the landlord’s HO apologised for the delay which they said was due to having to take time off unexpectantly. The HO stated they had not dealt with a case like his and so they had checked with the manager who was unsure a mortgage lender would provide an offer if the property was in joint names at present. The HO acknowledged the resident had provided the mortgage offer and said they would run this past the manager but expected to confirm their consent to proceed with staircasing as quickly as possible.
On 28 April 2022, the landlord’s HO told the resident it had informed its solicitors that it consented to the transfer of equity and that he could proceed on this basis with the staircasing.
On 11 July 2022, the resident’s solicitors requested that the landlord’s solicitor complete the staircasing on 15 July 2022. On 14 July 2022, the resident’s solicitor was informed by the landlord’s solicitors that completion would not be possible as they had received an email on behalf of the developer to deal with the restriction on the freehold title.
On 29 August 2022, the resident emailed the landlord’s HO saying he was “growing increasingly concerned” that his mortgage offer runs out on the 18 September 2022 and the process was “still being held up” on its side. He said the latest issue stopping the completion related to an outstanding query however he signed the documents as required nearly a month ago, and its solicitor had provided no news. The resident said it appeared that at every stage the landlord had made him “jump through unnecessary hoops” to try and delay the process.
On 31 August 2022, the resident sent a further email to the landlord’s HO asking for a response to his previous email.
On 1 September 2022, the landlord confirmed it had scanned the signed documents back to its solicitors and said it would put the originals in the post. It apologised for all the delays and said it would not delay the staircasing process to receive rent for longer. Regarding the restriction on the property, the landlord said that unfortunately this was not something it would pick up as it instructed its solicitors, and it was for them to investigate from the start.
On 5 September 2022, the landlord asked the resident to request a valuation extension for the property from his surveyors. It said a new inspection was not required, but a letter confirming they stand by the original valuation was needed.
In his emails dated 5 and 6 September 2022 the resident explained he was unhappy with having to pay a further fee for a valuation due to delays caused by the landlord.
On 12 September 2022, the landlord told the resident it understood the valuation report had been completed in time. It confirmed to the resident that it had given approval for completion to occur “next Friday”. The resident replied thanking the landlord for the update and asking the landlord about the fees he had incurred for valuations due to its solicitor’s delays.
The resident’s staircasing completed on 16 September 2022. On the same date the resident contacted the landlord advising he had incurred £869.97 in total for valuations made up of:
1. £299.99 in December 2021.
2. £269.99 in March 2022.
3. £299.99 in September 2022.
He stated due to the delay on the landlord’s side he requested it to reimburse some of the costs he had incurred.
On 22 September 2022, the resident emailed the landlord saying that he was still awaiting a response to his 16 September 2022 contact. The landlord’s HO replied on 23 September 2022 explaining it had asked its solicitors for a detailed history of events so it could identify the reason for the delay and said that it would provide a response on 3 October 2022.
The resident emailed the landlord on 3 and 5 October 2022 chasing a response.
The landlord’s records show it received a complaint from the resident on 7 October 2022 regarding the additional costs that he said was caused by its delays in processing his staircasing paperwork to 100% ownership.
During a call with the resident on 11 October 2022 he told the landlord it was unfair that he had incurred additional costs because of the landlord’s delays.
On 12 October 2022, the resident provided further details of his complaint to the landlord in which he set out delays that he believed had been caused by the landlord. He said the landlord’s solicitor told his solicitor on 29 March 2022 that the transfer of equity was outside the scope of the staircasing transaction and that he would need to contact the landlord directly for its consent. He said the landlord then told him that his lender was unlikely to proceed with the mortgage offer into his sole name if the property was still owned jointly. However, he said after he provided the landlord with his mortgage offer on 29 March 2022, he then did not hear back from it. The resident said it took until 28 April 2022 for the landlord to tell his solicitors that it consented to the transfer of equity and staircasing.
The resident stated he experienced the next issue on 14 July 2022 a day before the completion date had been agreed. He said the landlord’s solicitor informed his solicitor that completion would not be possible as they had received an email on behalf on the managing company to deal with the restriction on the freehold title. He was then required to sign an updated deed of covenant and pay an additional fee of £180 + VAT.
On 19 October 2022, the landlord provided a stage 1 response to the complaint. It said it was partially upholding the resident’s complaint because there were delays in processing paperwork, which may have resulted in an additional valuation being needed. However, it was unable to determine how much of a delay this may have caused. It said its HO agreed there had been service failings and delays on its part however, there had also been other delays not associated with it.
The landlord states that it understood that a transfer of equity resulting in a joint to sole ownership could be done simultaneously at the time of staircasing however his solicitor had referenced this in her communication about acting in the resident’s transfer of equity. It said its HO therefore followed its process on the joint to sole transfer and made attempts to query this with his solicitor and did not receive a response.
The landlord said it had reviewed communications between and it and its solicitors and these had been done within reasonable timeframes. It could see there were delays caused due to the restrictions identified by the developer and said that this issue ought to have been identified when staircasing began but this was equally down to his solicitors.
Within its response, the landlord stated that because of the delays with processing the homeownership paperwork, it offered compensation of:
1. £70.00 due to admin delays within its homeownership department.
2. £100 due to the inconvenience caused.
3. £284.99 for the additional valuation needed due to delays by the above service standards, as a gesture of goodwill.
On 1 November 2022, the resident requested the landlord escalate his complaint to stage 2 of its process. He stated that he had raised the landlord’s points with his solicitor, and they had reviewed his file and provided a detailed response providing copies of their communications with its solicitor. From this he could see that his solicitor:
1. Responded in a timely manner to queries the landlord and its solicitors raised regarding the transfer of equity and staircasing being completed at the same time. He said “severe” delays were caused by the landlord and its solicitors.
2. Raised points regarding restrictions and certificates in February and March 2022 respectively and not July and August 2022, as it had outlined.
3. Tried wherever possible to avoid delays.
The resident provided:
1. His solicitor’s communication sent to the landlord dated 21 February 2022 wherein they stated they acted for the resident in connection with the transfer of equity of the above property into his sole name.
2. His solicitor’s communication sent to the developer dated 21 February 2022 wherein they asked about restrictions to the title and requirements and fees for the transfer into his sole name to be completed.
3. His solicitor’s ‘enquiries before contract’ letter dated 24 March 2022.
The resident stated that given the information provided to him and the severe delays caused by the landlord and its solicitors during the process, he was unhappy with its stage 1 investigation into his complaint and requested that this was escalated to stage 2 of its complaints process.
In its stage 2 complaint response dated 20 January 2023, the landlord stated that it had reviewed the information supplied and its stage 1 complaint response and it agreed with its decision to partially uphold the complaint. It said that there was evidence of administrative delays, directly associated with its role in the transaction, however, it was reasonable that he should have to pay for 1 valuation in this process. Therefore, it would compensate him for the cost of the valuation fee as already mentioned in its stage 1 response.
It said as the resident was benefitting from paying rent whilst the transaction completed, it could see no evidence of financial loss which would justify a rent refund as per his request.
The landlord said in conclusion, whilst it agreed that there were administrative delays, it could not be held accountable for delays caused due to the restrictions identified by the developer. Furthermore, a rent reimbursement had not been justified. It stated that it would like to award him:
1. £70.00 for administrative delays (as awarded within the stage 1 response)
2. £150.00 distress and inconvenience (increase from £100 awarded at stage 1).
3. £284.99 reimbursement for the valuation fee
4. £100.00 poor complaint handling for failing to respond to his complaint at stage 2 within 20 working days.
In his communications with this Service dated 13 February 2023 and 22 March 2023, the resident said he was dissatisfied with the landlord’s handling of his staircasing request as it took 9 months to complete. He stated for each month it delayed, he had to pay the landlord rent rather than paying off a mortgage and he believes that the landlord delayed the process intentionally so it could benefit from him paying rent for longer.
The landlord incorrectly told him that staircasing and transferring equity could not be done at the same time and its final response did not address his core complaint.
On 15 February 2023, the resident forwarded to this service the email from his solicitor to the landlord’s solicitor dated 9 March 2022 confirming that they were acting in relation to the resident’s staircasing and transfer of the property into his sole name.

Assessment and findings

The landlord’s handling of the resident’s request to staircase to 100% ownership of the property

In accordance with the terms of the lease and the landlord’s home ownership policy, the resident notified the landlord of his intention to purchase the remaining 55% shares of the property by completing the ‘intention to staircase’ form which was received by the landlord on 20 December 2021. The evidence shows the resident then completed and returned the ‘proceed form’ on 26 January 2022 after which the transaction completed on 16 September 2022.
In his formal complaint the resident stated he was unhappy about the length of time taken to complete his staircasing request which he said was caused by delays on the landlord’s side and had impacted him financially.
The lease or the landlord’s policies and procedures do not give an estimated timeframe for completing a staircasing transaction, however, on the face of it, 9 months to complete a staircasing transaction is indicative of an unreasonable delay. It is noted however that alongside the purchase of the remaining shares in the property, the resident required a transfer of ownership from joint into his sole name.
It is acknowledged that to facilitate and progress the transfer and staircasing transactions, the parties engaged solicitors. This Service recognises that whilst it is reasonable to hold the landlord to account for any delays on its part or by third parties acting on its behalf, the landlord is not responsible for any delays shown to be caused by the resident or his solicitors.
In its stage 1 response the landlord accepted there were delays on its part in processing the paperwork but stated there were other the delays that it was not responsible for.
Initially there was a delay of nearly 4 weeks by the landlord in instructing its solicitors. After receiving the proceed form from the resident on 26 January 2022, the landlord did not instruct its solicitors until 22 February 2022 despite telling the resident on 4 February 2022 that it would instruct them that same day. The landlord has not explained this delay and as such this delay was unreasonable.
In its stage 1 response, the landlord acknowledged that a transfer of equity resulting in a joint to sole ownership could be done simultaneously at the time of staircasing but said there was a delay because his solicitor did not make clear she was acting in relation to both transactions.
Having reviewed the correspondence, it is accepted that the resident’s solicitor did not explicitly reference both transactions when first writing to the landlord on 21 February 2022, only referring to the resident’s transfer of equity. Had they done so, this may have avoided any confusion about the resident wanting to transfer ownership and staircase simultaneously. However, the landlord had already been notified of the resident’s staircasing application in respect of the property by this stage, therefore, it is reasonable to expect the landlord to have linked the two transactions which also may have avoided the delay. The landlord did then contact the resident’s solicitors on 14 March 2022 to query the timing of both transactions. However the resident’s solicitors had already confirmed to the landlord’s solicitor’s (on 9 March 2022) that prior to staircasing the resident required the property to be transferred into his sole name and requested consent from the landlord for the transfer and for amended staircasing documents (reflecting the resident’s sole name). Therefore, any delay caused by a lack of clarification from the resident’s solicitor can only be applied up to 9 March 2022 when they confirmed that they were acting for the resident regarding both transactions.
Following this, it is clear there was some delay with the landlord providing consent for the transfer which the resident needed for the staircasing to complete. Initially a minor delay was caused by the landlord believing a mortgage lender would not lend on the resident’s sole name whilst the lease was in the joint names of the resident and Mr X. However, on 29 March 2022 the resident sent evidence of the lender’s agreement to the landlord’s HO confirming agreement to lend. The landlord then failed to respond to the resident until 27 April 2022 and only did so after the resident chased it twice on 22 and 27 April 2022 before it provided consent for the transfer on 28 April 2022. The landlord’s HO apologised for the delay which they said was due to them having to taken off time unexpectantly, however, we are mindful that the resident’s solicitors had also chased the landlord’s solicitor twice for its consent during the same period, yet it took until 8 May 2022 for the landlord’s solicitor to confirm this. As such this further delay is attributable to the landlord.
Regarding a delay caused by restrictions to the freehold title on the registry which needed to be satisfied before completion could take place, it is noted that the developer highlighted this issue to the landlord’s solicitors on 13 July 2022. They then relayed this to the resident’s solicitors on 14 July 2022 and advised of the requirements. It is acknowledged that this issue meant completion would not take place on 15 July 2022 as sought by the resident’s solicitors. In its stage 1 response, the landlord said the restrictions ought to have been identified earlier on in the staircasing process by both solicitors, saying the resident’s solicitor was equally responsible for this delay. Evidence of correspondence between the parties’ solicitors shows that the resident’s solicitor identified the restrictions on the title and raised this with the developer at the outset on 21 February 2022 and again with the landlord’s solicitors on 9 March 2022. There is no evidence of this being acted upon until 13 July 2022. Therefore, this service considers this delay in addressing the restrictions on the title lie with the landlord (or those acting on its behalf) rather than the resident’s solicitor.
In its stage 1 response the landlord also said that it was not responsible for the delay caused by late requests for building certificates and service charge queries. However, the evidence of correspondence between the parties’ solicitors demonstrates that the resident’s solicitors raised ‘enquiries before contract’ which included a request for building certificates and service charge queries with the landlord’s solicitors on 24 March 2022.Therefore, this was much earlier than the dates referred to by the landlord in its stage 1 response of 19 July 2022 and 25 August 2022 respectively. Therefore, his indicates that the delay in acting on these enquiries lies on the landlord’s side rather than the resident’s.
In summary, it is clear from the evidence that most of the delays with completing the transactions were because of failings by the landlord or its solicitor. However, there is no evidence to support the resident’s suggestion that the landlord delayed the process intentionally to prolong the period in which he had to pay it rent. Nonetheless, when there are failings by a landlord, the Ombudsman will consider whether redress offered by the landlord during the complaints process put things right and resolved the resident’s complaint satisfactorily in the circumstances. In considering this, the Ombudsman takes into account whether the landlord’s offer of redress was in line with the Ombudsman’s Dispute Resolution Principles; be fair, put things right and learn from outcomes.
At stage 1 of its complaints process, the landlord offered the resident compensation to acknowledge delays in staircasing paperwork consisting of:
1. £70.00 for administrative delays.
2. £100.00 distress and inconvenience.
3. £284.99 reimbursement for the valuation fee (as per its offer in the stage 1 response)

Total: £454.99

At stage 2 it increased the amount for distress and inconvenience by £50 to £150. Although the compensation offered went some way to putting right the failings, this service is mindful that the landlord did not acknowledge responsibility for the extent of the delays that this Service consider it is responsible for. This indicates a failure by the landlord to act in accordance with our above principles to learn from outcomes. In the circumstances, it is reasonable for the landlord to pay the resident additional compensation of £200 for the stress inconvenience, time and trouble caused by its delays and failings.
Whilst the resident requests that the landlord reimburse him £269.99 for the cost of the second valuation that he had to obtain in March 2022, on balance there is insufficient evidence to demonstrate he would have avoided this cost had the landlord not delayed in progressing the transactions as such the landlord is not required to reimburse this cost.

Complaint handling

The landlord issued its stage 2 response on 10 January 2023. As the resident requested escalation of his complaint on 1 November 2022, this was issued 27 workings days outside of its 20-working day timescale in its policy. This is evidence of the landlord not following its complaint handling policy.
There were factual inaccuracies in the stage 1 complaint response for example the timing of the resident’s solicitor’s search request, indicating a failure by the landlord to properly investigate the complaint. This indicates the landlord did not take the resident’s complaint sufficiently seriously.
This service is mindful that in his escalation request to the landlord, the resident disputed aspects of its stage 1 response and supplied evidence obtained from his solicitor in support of his position. The purpose of the review at stage 2 is for the landlord to examine its stage 1 investigation and its findings to ensure this was carried out fairly and the correct and appropriate outcome reached. However, in its stage 2 response, the landlord maintained its position that it could not be held accountable for the delays set out in stage 1 including the restrictions on the title. This shows that the landlord missed an opportunity to carry out a more thorough investigation and put right aspects of its stage 1 response which this review has found were inaccurate. This shows poor complaint handling and an unwillingness to learn from the resident’s complaints; an effective complaints process allows a landlord to learn from the issues that arise for a resident which in turn can drive service improvements.
Furthermore, its stage 2 complaint response did not address all the resident’s points raised in his escalation request, for example the date his solicitor raised enquiries and searches with its solicitor. The Ombudsman’s Complaint Handling Code (the Code) makes clear landlords should address all points raised in the complaint and provide clear reasons for any decision. Its failure to acknowledge or explain why it disagreed with resident’s concerns outlined is further evidence of poor complaint handling.
Based on the findings above, there was maladministration by the landlord whilst handling the resident’s related complaint. In its stage 2 response, the landlord acknowledged the delay in providing its stage 2 response and offered the resident £100 in compensation. However, because it did not acknowledge all of the failings identified above, the redress offered to the landlord did not resolve the complaint.

Determination (decision)

In accordance with paragraph 52 of the Housing Ombudsman Scheme, there was maladministration by the landlord when handling the request to staircase to 100% ownership of the property.
In accordance with paragraph 52 of the Housing Ombudsman Scheme, there was maladministration by the landlord whilst handling the related complaint.

Reasons

The majority of the delays with progressing the transactions were due to issues on the landlord’s side. Its offer of redress went some way to putting right the failings however it did not reflect the extent of the delays and the distress, inconvenience time and trouble caused to the resident.
There was a delay by the landlord in providing the stage 2 response and its final response failed to address the points raised by the resident regarding inaccuracies in the stage 1 response. As it did not acknowledge or put right all of its failings, the redress provided during the complaints process did not adequately resolve the complaint.

Orders and recommendations

The Ombudsman orders that the landlord within 4 weeks:
1. Pay additional compensation to the resident in the total sum of £350 consisting of:
  1. £200 for failings whilst handling the request to staircase to 100% ownership of the property (£704.99 in total).
  2. £150 for complaint handling failings (£250 in total).
2. Provide this Service with a timeline for providing staff training on complaint handling, including on how to carry out appropriate and effective complaint investigations.