Peabody Trust (202006782)

Back to Top

REPORT

COMPLAINT 202006782

Peabody Trust

21 February 2022


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 level of compensation the landlord offered in relation to its handling of the sale of the property.

Background and summary of events

Background

  1. The property comprises of a block of flats, one of which the resident owned a 45% share.
  2. The lease explains that if the shared owner wishes to sell the property, the landlord must give consent for them to do so and can require them to either surrender the lease to it or, assign the lease to a person it nominates. The landlord has eight weeks to find a buyer from the time it has all documents to market the property. It is responsible for marketing the property, reviewing and approving applications, allocating a buyer and liaising with the parties to progress the sale to completion.
  3. To initiate the sales process, a resident must submit a notice of intention form and pay a £350 admin fee to the landlord. On completion of the sale, the landlord charges a 1.5% of the share price plus VAT, along with its legal fees and disbursements.
  4. When selling a property, residents have to choose a surveyor from a list the landlord provides. The resident must also choose a photographer from the landlord’s panel of photographers. The landlord explicitly advises that residents should not instruct the surveyor nor the photographer, as it will do this on their behalf. It states that it will instruct the resident’s chosen surveyor within two days of receiving their completed intention to sell form.
  5. The landlord has two stages in its complaints procedure. At stage one, its response time is 10 working days. At stage two, it states that an acknowledgment is sent within three working days with confirmation of the date the resident can expect a response.    
  6. The landlord’s compensation policy sets out that it can consider compensation for time, trouble and inconvenience. The maximum amount of compensation it can award for this under its policy is £400. For poor complaint handling, where it has not followed its policy, it can offer a maximum of £100.

Summary of events

  1. On the 1 May 2020, the resident contacted the landlord for information about how to sell their property. The landlord initially sent the resident its guidance on the ownership process and later sent the resident an intention to sell form, on 12 May 2020.
  2. The resident completed and returned the form on 27 May 2020 and said that they would call the landlord to pay the £350 administration fee. They asked the landlord to instruct the photographer and surveyor so that the sale process could get underway as soon as possible.
  3. The landlord acknowledged receipt of the form and documents, on 2 June 2020 and said that it would call the resident that day to take the administration fee payment. The resident followed up with the landlord on 3 June 2020, as they had not been contacted. It responded on 4 June 2020, apologised that it did not call, and said that it could call the resident there and then. The resident confirmed they was available for a call however, the landlord did not call until the following day to take the payment.
  4. On 11 June 2020, the landlord instructed the surveyor to undertake the valuation of the property. The resident arranged an appointment with the surveyor, for 17 June 2020.
  5. On 13 June 2020, the resident contacted the landlord and asked that they instruct the photographer as soon as possible. They explained that they had found a property to buy and was keen to expedite the sale process, so not to lose out on the property they had an interest in. The resident then contacted the photographer directly and arranged an appointment for 20 June 2020.
  6. The day after the valuation survey, the resident contacted the landlord as they understood the report had been sent the day before. The resident asked the landlord to send the report for approval to the relevant team to avoid any delay. The resident also made the landlord aware that they had scheduled the appointment with the photographer.
  7. The landlord responded and asked the resident whether they had been contacted by the photographer. The resident confirmed they made direct contact with the photographer and asked the landlord again, if it had received the valuation from the valuation survey.
  8. The resident contacted the landlord again on 22 June 2020, to ask if it received the valuation from the survey and if so, whether it could send this for approval. They also advised that the photographs and floorplan from the photographers visit, would be available the following day.
  9. The landlord responded on 23 June 2020, with confirmation that it received the valuation. It advised that this would be prepared for management authorisation and would be emailed to the resident the following day. The valuation was sent to the resident on 25 June 2020. On receipt, the resident requested a review of the valuation which was then revised and agreed on 18 July 2020.
  10. On 24 July 2020, the landlord sent the resident the intention to proceed form and asked them to confirm that the property details were correct before it uploaded the property sale online. The resident returned the form the same day and confirmed that viewings could take place on 15 August 2020. Following the viewings, the landlord informed the resident on 21 August 2020, that it offered the property to a buyer and had given them three days to accept the offer.
  11. The resident wrote to the landlord on 24 and 25 August 2020 for an update on whether the offer was accepted. It confirmed on 25 August 2020 that it was. It said that it would instruct its solicitors that day and would aim to send the Memorandum of Sale (MoS) the following day. It also advised the buyer of this, who then informed that they would no longer be using the solicitor whose details they initially provided to the landlord.
  12. The resident wrote to the landlord on 28 August 2020 and asked that it ensured the MoS was issued that day, as they required it urgently for their mortgage application. It responded that it was awaiting the buyer’s solicitor’s details and said that the buyer informed it that they would provide this by 1 September 2020. The landlord agreed to keep the resident updated.
  13. The resident contacted the landlord on 1 September 2020 and asked the landlord if they had received the buyers solicitors details and whether it had an update on the MoS. The landlord responded the following day and advised that it followed up with the buyer the evening prior. It said that the buyer had not provided the details, but it was expecting this within a few days. The landlord agreed to keep chasing the buyer. The landlord has informed this Service that following this, it chased the buyer for their solicitor’s details again on 4 September 2020.
  14. By 7 September 2020, no response was received from the buyer, so the landlord issued the MoS without the buyer’s solicitor’s details. It sent a revised version on 10 September 2020.
  15. The resident submitted a formal complaint to the landlord on 20 October 2020, about their dissatisfaction with the landlord’s handling of the sale. The landlord acknowledged the complaint and issued its stage one response on 3 December 2020. It said that:
    1. There was a delay in it reviewing and authorising the valuation.
    2. There was a delay in the property being advertised following the resident’s confirmation that the details about the property were correct. However, it said that it allocated the property earlier than the deadline.
    3. There was a delay in it sending the MoS.
    4. It apologised for the delay and offered the resident £500 off of their administration fee in recognition of this.
  16. The resident responded with a request for a stage two complaint on 6 January 2021. They explained that they wished to progress the complaint because they remained unhappy with the level of compensation offered. They considered the fees the landlord charged were unreasonable for the level of service it provided. 
  17. The resident did not receive a response from the landlord and contacted this Service for assistance. This service wrote to the landlord on 9 February 2021, and it wrote to the resident on 11 February 2021, asking for details of their complaint. The resident responded on 13 February 2021 with a copy of their email of 6 January 2021. The landlord contacted the resident again on 16 February 2021, for clarification on their complaint and the resident confirmed that the main points of their complaint were;
    1. The fees the landlord charge residents were not considered proportionate to the service it delivers. They compared the cost the landlord charge to that of an estate agent.
    2. They believed that they could have received the same level of service or, better service for a cheaper cost, if they had sold through an estate agent. 
    3. There were delays in the landlord issuing the MoS and they believed that this was the result of the landlord not completing thorough checks into the buyer.
    4. Estate agents would accompany viewings, be present during the completion and would answer phone calls. They said that in their case, they were made to wait for their calls to be answered numerous times.
    5. They believed that there had been poor service throughout the process.

The resident explained that they were seeking reimbursement to the amount of £1500 in recognition of the landlord’s service delivery and the distress they experienced as a result.

  1. The resident contacted this Service again on 11 March 2021, as they had not received a response to the stage two complaint. We wrote to the landlord on 16 March 2021 to ask that it provide the resident its response. It provided its final response on 24 March 2021 and said:
    1. That it understood that the main point of dissatisfaction for the resident was that they felt the fees the landlord charged were not reflective of the service they received and were not comparable to estate agents.
    2. That it was not fair to compare its sales team to estate agents as they do not work on the same basis. It said that its sales team oversee the sale of shared ownership properties, which is different to selling a fully owned property.
    3. That applicants have to be vetted to ensure that they meet the qualifying criteria, which makes the process more complicated than usual. It advised the resident that if they had issues with the administration costs, they should have raised this at the time.
    4. It was sorry to hear of the difficulty the resident had getting in touch with the sales team. However, said that if this was raised at the time, it could have addressed this. It reassured that the team were working to improve and recognised that selling a property can be stressful.
    5. For the time and trouble the resident experienced, the maximum it could offer in accordance with its compensation policy is £400. As it offered in excess of this, it did not increase its offer.
    6. For the delay in its response to the complaint, it offered £100.
  2. The resident responded to the landlord on 26 March 2021 advising that they remained unhappy. They brought the complaint to this Service for formal consideration, and we tried to get the parties to reach an early resolution of the dispute. The resident explained that they were seeking reimbursement of 90% of the fees they paid to the landlord. The landlord offered £800 including the £600 it offered in the complaints procedure. The resident declined the offer, and the case was progressed for investigation.

Assessment and findings

  1. The terms and conditions when selling a shared ownership property with the landlord explains that the landlord have the sole marketing rights of the property for the initial eight weeks from the receipt of the Intention to Proceed form.
  2. When submitting the intention to sell form, the landlord informs resident not to instruct the surveyor or the photographer, as it will so this on the residents behalf. The resident is liable to pay the providers directly for the service.
  3. The landlord’s guidance on the sale of shared ownership properties explains that it will market the property, approve applications, allocate a buyer, liaise with all parties and progress the sale to completion. It specifically states that will:
    1. Instruct the resident’s chosen surveyor within 2 working days of receiving their completed intention to sell form.
    2. Send residents a preview of the property listing before it the advert is put online and ask the resident for a convenient time for viewings to take place.
    3. Issue the successful applicant with an offer letter, arrange for them to attend a financial assessment and once confirmation of affordability has been received, the MoS will be issued. It states that thereafter, the resident’s solicitor will handle the relevant legal work required to assign the lease over.
  4. In this case, it took the landlord 7 working days from the date the submission of the intention to sell form, to call the resident and take the initial payment of the admin fee. It then instructed the surveyor four working days later. Its instruction of the surveyor was appropriate and in line with its responsibility however, the time it took to do so was outside of the timeframe set out in its guidance.
  5. The landlord informed that it also instructed the photographer the same day as the surveyor, however, has not provided any evidence of this. The resident requested that it instruct the photographer on two occasions, and it did not respond to the requests promptly. This resulted in the resident contacting the photographer themselves.
  6. In respect of the valuation report, the resident asked the landlord on three occasions whether it had received this, before it confirmed it did on 23 June 2020. It did not approve and send this to the resident until a day after it said it would. In the investigation of the complaint the landlord identified this delay and considered compensation in light of this, this was appropriate.
  7. The landlord initially advised the resident and the buyer, that it aimed to issue to the MoS by 26 August 2020. There is no evidence that the landlord prompted the buyer to provide the updated solicitor details at the earliest convenience after it was made aware that they had chosen to go with a different solicitor. There is also no evidence that the landlord proactively kept the resident informed about this, until the resident chased this on 28 August 2020. This was not appropriate as the landlord is responsible for the progress of the sale, it has a responsibility to keep all parties informed about any updates it receives. This is especially when any change impacts its ability to meet target dates it has provided the parties, for the issuing of documents which form a crucial part of the sale process.  The landlord did however acknowledge and apologise for this delay, and it was appropriate that it did so.
  8. The landlord’s responded to the resident’s complaint outside of its timeframe and the resident required this Service’s intervention before the complaint response was issued. The landlord also recognised this in its response and offered the maximum compensation it could under its policy for the poor handling of the complaint which was appropriate.
  9. The landlord’s compensation policy explains it will offer up to £400 for where there has been extensive disruption and high effort to resolve. In this case, the residents effort and time spent following up on the matter was extensive and there was a delay in matters progressing which the landlord has recognised though, not to the full extent as it failed to identify the delay in its instruction of the surveyor and photographer.
  10. Nevertheless, the landlord’s overall offer of compensation, was reflective of the time, trouble and delay the resident experienced as a result of its service delivery. The level of compensation it offered was in excess of the maximum it can offer in its policy and was proportionate in the circumstances and in line with the Ombudsman’s principle of putting things right. The Ombudsman’s remedies guidance indicates that offers up to £250 are for instances where the service failure has resulted in some impact either over a short duration and or has not significantly impacted the outcome for the complainant. In this case, the landlord’s service failure did result in delays during the sale process and as a result, the resident spent time and trouble throughout the process so that matters could progress.
  11. The resident has indicated that they are seeking redress equivalent to 90% of the admin fee they paid to the landlord. However, while there was delays and the resident was required to follow up with the landlord during the process, it did act in line with its responsibilities, with the exception of the instruction of the photographer and, its actions did not result in the loss of a sale.

Determination (decision)

  1. In accordance with paragraph 55c, the landlord has made an offer of redress following the Ombudsman’s intervention which, in the Ombudsman’s opinion, resolves the complaint satisfactorily.

Reasons

  1. While the landlord did not recognise the entirety of the shortfalls in its service delivery in its response to the complaint, it acknowledged that its service delivery fell short of what is expected and made an offer of compensation which was reflective of the impact that the delays overall had on the resident and their time and trouble pursuing the matter. The above finding of reasonable redress, therefore, is dependent on the payment being made to the resident.

Recommendations

  1. That the landlord arrange for the payment of £800 compensation to be made to the resident within three weeks of the date of this determination. Once the payment has been made the landlord is to provide confirmation to this Service.