Orbit Group Limited (202313968)

REPORT

COMPLAINT 202313968

Orbit Group Limited

28 June 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

1. The complaint is about the landlord’s:
   1. Handling of the resident’s request to purchase her property through Right to Acquire (RTA).
   2. Handling of the associated complaint.

Background

2. The resident holds a 5 year fixed, Affordable Rent tenancy with the landlord, the tenancy began on 10 December 2020. The property is a 4 bedroom house. The landlord has no vulnerabilities recorded for the resident.
3. The resident submitted a RTA application in January 2019. Due to incorrect information on the landlord’s system this application was declined. The resident submitted a further RTA application on 20 June 2022 as she had researched the funding for the development where she lived. The landlord admitted the RTA application on 6 October 2022 following meetings with its finance and development departments, it confirmed the property had received grant funding. The application progressed and the property was valued at £470,000.
4. The resident first complained to the landlord after receiving the valuation for the property, she submitted her complaint on 26 February 2023. In her complaint the resident said:
   1. Her RTA application should be dated 4 January 2019.
   2. She reapplied following her own research on how the development was funded.
   3. It took the landlord over 12 weeks and repeated email reminders to receive an outcome.
   4. It the subsequently took a further 12 weeks to receive the valuation report and offer.
   5. There had been a “series of detriments” due to the decline of the initial RTA application and the delays in the current application.
   6. The resident supplied numerous documents to highlight the financial detriment the delay had caused.
5. The landlord advised the resident on 30 March 2023, after seeking legal advice, it would offer the property at what the valuation would have been in January 2019. It apologised that the answer to the resident’s complaint had taken longer than expected. It also advised, it had considered the proposals made by the resident and appreciated its error for which it could only apologise. As a good will gesture it offered to fund the resident’s legal costs in securing the property.
6. The resident responded on the same day and asked her complaint to be escalated to the next stage of the complaints process as the remedies offered were not “compensatory to the huge detriments” that she had suffered due to the initial RTA application being declined.
7. Following the residents request to escalate evidence has been provided that confirms the landlord did not record her complaint under its formal complaints process. It provided a stage 1 complaint response on 9 May 2023. Within this response it:
   1. Acknowledged the offer letter sent to the resident on 13 January 2023 was outside the allocated timeframe for RTA responses.
   2. Advised due to an internal backlog and miscommunication with other areas of the business her complaint dated 26 February 2023 was not responded to within the allocated timeframe.
   3. apologised for stress and inconvenience caused.
   4. upheld the resident’s complaint.
   5. confirmed that the property would be offered at its initial value and it would cover legal costs.
   6. Said it was unable to refund the rent from January 2019 but offered £120 compensation for the error resulting in the rejection of the initial RTA and the delay in responding to the resident’s complaint.
   7. The landlord concluded and advised on a call to the resident on 9 May 2023, she had advised she was not happy with the response and requested the complaint be escalated.
8. The landlord provided its final response on 16 June 2023. Within this response it summarised the detriment to the resident and the resolution she was seeking. It said:
   1. It would not refund the rent from January 2019 due to there being a tenancy in place and the property being enjoyed by the resident as per the tenancy agreement.
   2. It could not offer a further discount on the value of the property, it had already agreed to offer the property at the 2019 value and it did not see a further discount as appropriate.
   3. It could not convert the property to shared ownership, it was only able to staircase at the current market value, the RTA offered an approximate discount of £16,000 and it could not offer both.
   4. In addition to the £120 offered at stage 1 it offered £400 as a goodwill gesture for any upset and inconvenience caused.
9. The resident requested the Ombudsman formally investigate her complaint on 6 October 2023. As a resolution to her complaint, the resident requested:
   1. The landlord to refund the rent paid since January 2019 and discount the amount against the value of the property.
   2. The landlord to pay “proportional financial compensation” for the “substantial detriment”.

Assessment and findings

Scope of investigation

10. Paragraph 42(f) of the Housing Ombudsman Scheme states “The Ombudsman may not consider complaints which, in the Ombudsman’s opinion concern matters where the Ombudsman considers it quicker, fairer, more reasonable or more effective to seek a remedy through the courts, other tribunal or procedure”. The Ombudsman will not consider claims for financial loss. This is because the Ombudsman does not have the jurisdiction to award damages, nor does it have the necessary expertise to assess liability and determine loss. These 2 are matters within the jurisdiction of the court and the Ombudsman cannot provide a legal determination. The resident therefore may wish to seek independent legal advice on this matter. Whilst we cannot consider financial loss, consideration has been given to any general distress and inconvenience which the resident reports that they experienced because of any errors made by the landlord.

The landlord’s handling of the resident’s request to purchase her property through Right to Acquire.

11. Residents of housing associations have the statutory right to acquire in certain circumstances as set out under the Housing Act 1985, as amended by the Housing and Regeneration Act 2008 and in accordance with the associated regulations. The scheme offers the opportunity to purchase an eligible property at a discount, which is a fixed amount, determined by the Secretary of State based on the geographical location of the property.  Although the landlord declined the resident’s initial RTA application in January 2019, the landlord has now accepted that the resident’s application met with these conditions, indicating the resident had the statutory right to acquire.
12. It is not disputed that the resident incurred delays in the RTA application process. On 20 June 2022, the resident submitted a Right to Acquire by email to the landlord, the landlord advised however it had not received it, the resident resubmitted the RTA application via email on 5 July 2022. The landlord updated the resident on 19 July 2022 and 17 September 2022 advising it was looking into the application before saying it could admit the application on 6 October 2022. Evidence has been provided that shows the resident chasing the landlord for updates via email in order to receive the outcome of her application. Landlords should confirm a resident’s eligibility for the RTA within 4 weeks, it took the landlord 15 weeks to confirm the residents eligibility.
13. It is also not clear from the evidence when the offer notice (RTA3) was sent to the resident, however its complaint response dated 9 May 2023, stated the notice was sent on 13 January 2023 and the resident acknowledged receiving the valuation on 1 February 2023. Landlords are expected to provide the offer notice within 8 weeks, again this was delayed by over 12 weeks by the landlord. Although the landlord does not dispute these delays and acknowledged them in its complaint response on 9 May 2023, no apology was offered which was not reasonable and added to the resident’s frustrations with the perceived delays incurred already by the landlord.
14. The landlord offered the property to the resident at the value it would have been in January 2019 and offered to fund the resident’s legal costs in acknowledging its error with the initial application. The Right to Acquire a property is governed by legislation which sets out clear eligibility criteria and process. If the landlord has properly considered the legislative criteria and rules, the Ombudsman is not empowered to order a landlord to act contrary to legislation; neither can it order it to reverse its decision if that would require the landlord to act beyond its legislative authority. The resident has stated she would like an additional discount offered on the value of the property. For the reasons above, the Ombudsman is unable to make a further determination in relation to this.
15. Overall, the landlord demonstrated it acknowledged its errors in processing the residents RTA application and provided redress to try to put the matter right for the resident. The landlord did not however acknowledge the time and trouble the resident took in chasing the landlord for updates on her application, therefore a finding a service failure has been made.

The landlord’s handling of the associated complaint.

16. The landlord has a 2 stage complaints process. Its complaints policy at the time of this complaint said it would respond to stage 1 complaints within 10 working days and stage 2 complaints within 20 working days. At both stages, the policy states the complainant will be contacted within 5 working days to acknowledge the complaint being made. The policy says the landlord will discuss an extension and explain when a response can be expected if more time is required.
17. The resident’s initial complaint on 26 February 2023, was not managed through its formal complaint process, which was not appropriate. Furthermore, it took 24 working days to respond, which it also not in line with its own complaints policy. Evidence was provided that showed the resident had to chase up this response by the landlord in this time also as she had not received a response within its stated timescales.
18. Once the resident requested this complaint be escalated, internal emails were provided from April 2023 which showed the landlord acknowledging the complaint had not been recorded as a stage 1 complaint or managed through its formal process. The landlord took the decision to record the resident’s escalation request as a stage 1 compliant, which it acknowledged on 4 May 2023. This acknowledgement gave no timescale for when the resident could expect a response and was 23 working days after the resident had requested her complaint be escalated, 18 working days outside the timeframe of 5 working days for an acknowledgement within its policy.
19. The landlord advised the resident, in its complaint response on 9 May 2023 that the initial complaint made on 26 February 2023 was not raised as a formal complaint due to an “internal backlog and miscommunication with other areas of the business”. On 16 May 2023, it advised it was receiving a high number of enquiries and therefore there would be a delay in contacting the resident about her stage 2 complaint. Although the landlord apologised for this, it did not demonstrate that it had adequately investigated what had happened in order to improve its services in the future. The landlord failed to demonstrate that it had learnt from outcomes in its complaints investigation.
20. The landlord provided its formal stage 1 response on 9 May 2023, upholding the resident’s complaint and offering £50 for the failure to respond within its timescales. It provided its final response on 16 June 2023 where it offered an additional £400 as a goodwill gesture for any upset and inconvenience caused. The contents of the landlord’s complaint responses at each stage focussed on resolution, it acknowledged the delays in its complaint responses and offered redress, which demonstrated the landlord attempted to put the matter right for the resident which was appropriate.
21. When there are failings by a landlord, as is the case here, the Ombudsman will consider whether the redress offered by the landlord (apology, compensation and details of lessons learned) 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. This service will also consider the resulting distress and inconvenience and the resident’s circumstances will be taken into account.
22. In respect of the landlord’s complaint handling, a finding of service failure has been made, the inadequacy of the early stages of the complaint process caused the resident significant time and trouble pursuing the matter through a multi-stage process, having to chase the landlord for updates and receiving no clear timescales for when she could expect a response at each stage.

Determination

23. In accordance with paragraph 52 of the Housing Ombudsman Scheme, there was service failure by the landlord in relation to its handling of the resident’s request to purchase her property through Right to Acquire.
24. In accordance with paragraph 52 of the Housing Ombudsman Scheme, there was service failure by the landlord in relation to its handling of the associated complaint.

Orders

25. The landlord is ordered to:
    1. Apologise to the resident for the failures identified in this determination.
    2. Pay the resident £250, to include:
       1. £100 for its service failure in its handling of the resident’s request to purchase her property through Right to Acquire.
       2. £150 for its service failure identified in its handling of the resident’s complaint.
26. This amount is in addition to the previous amount offered by the landlord in respect of this complaint. If it has not paid the resident the £520 previously offered, it should do so alongside the above.
27. The landlord should provide evidence to this service that it has complied with the above order within 4 weeks of this determination.
28. Within 8 weeks of the date of this determination, the landlord is ordered to review the information it holds on its relevant systems to ensure the information is sufficiently accurate to assist staff in making decisions on a Right to Acquire application.
29. The landlord should provide evidence to this service that it has complied with the above order within 8 weeks of this determination.

 Recommendations

30. It is recommended that the landlord re-enter into negotiations on the purchase of the property through the Right to Acquire scheme with the resident.
31. It is recommended that the landlord updates its website with information on the processes of purchasing a property, including timeframes and costs that residents can expect.