Peabody Trust (202107763)

REPORT

COMPLAINT 202107763

Peabody Trust

15 May 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 reasonably and competently.

The resident and the landlord have submitted information to the Ombudsman, which has been carefully considered. Their accounts of what 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 handling of:
   1. the replacement of cladding; and
   2. the associated complaint.

Background

2. The resident is a shared ownership leaseholder of a two-bedroom flat (‘the property’) owned by the housing association landlord. The property is on the ground floor of a four-storey purpose-built block set within a complex (‘the complex’) of four blocks.
3. Following the Grenfell Fire tragedy (June 2017), the landlord launched an urgent remedial works programme on or around 1 July 2019. The programme aimed to remove combustible wooden cladding from the balconies and apply a temporary fire-resistant material to the structure of the building in the interim whilst it devised a permanent solution. The landlord also introduced a waking watch, where fire-trained operatives patrolled the complex continuously. The landlord said it would not charge residents for the waking watch.
4. On 9 March 2020, the landlord wrote to the residents of the block and said the building was now in a “state of safety”. As such, it cancelled the waking watch. The landlord said the External Wall System Fire Review Certificate (EWS1) would be issued upon completion of the then outstanding works. However, the remedial works did not progress further at that time.
5. On 9 July 2020, 12 months after the commencement of the programme, the resident informed the landlord that she wanted to sell her home. She said the Landlord must have initiated the works and later decided to cancel the waking watch based on specialist advice. Therefore, the landlord must have documentation to demonstrate that the building was “low risk”. In particular, she requested a copy of the Fire Risk Assessment (FRA) and a brief explanation of why the works had not been completed since the programme began. The landlord said the fire safety team would contact the resident directly.
6. On 6 August 2020, the resident complained to the landlord. Her concerns were that:
   1. The landlord had not, at that time, provided the FRA and had been unable to answer any of her queries on why the programmed works had stalled.
   2. The replies she had received from the landlord had been unsatisfactory.
   3. She explained that she had a limited time to complete the sale before a new valuation of the property would be due.
7. On the same day, the landlord wrote to the resident informally and not via its complaint procedure. It advised that it was unable to provide a date for the ESW1 to be completed. It said the works had stopped during the lockdown but had since re-started.
8. Between 6 August 2020 and 24 May 2021, there were 24 email exchanges between the resident and the landlord. In summary, the resident repeatedly expressed her dissatisfaction and requested information on why the works had stalled and details of the fire risk assessments. The landlord’s response was that the EWS1 would be provided upon completion of the works. There is no evidence that the landlord provided the FRA as requested.
9. On 24 May 2021, the resident emailed the landlord’s chief executive directly, and subsequently, the landlord escalated the complaint to stage one of its complaint procedure. The landlord issued a response on 8 June 2021. However, it did not address the resident’s requests for information, and it did not explain the reasons for the delays in completing the works. The resident explained that she was dissatisfied with the landlord’s response.
10. The landlord responded on 30 July 2021 with its final response. It said:
    1. During the pandemic, all non-emergency jobs stopped. This was followed by unpredictably changing guidance from the government, which created a risk to contractors and increased insurance premiums.
    2. It forced the landlord to review the programme’s specifications to complete the work within the budget. It, therefore, had to repeat the tendering process.
    3. As labour costs increased significantly post-Brexit, the chosen contractor wanted to withdraw from the contract, but the landlord absorbed the cost to ensure the programme did not suffer further delays.
    4. The landlord said it was unable to offer compensation for the delay because the cause was outside its immediate control.
    5. It had responded to the concerns, but unfortunately, it had not been able to provide positive information.
    6. The landlord did not mention the resident’s request for the FRA.
11. On 1 October 2021, the landlord offered the resident £500 compensation. The landlord said this was the maximum it could offer under its policy. It also said it would speak to its leasehold team about providing the resident with a copy of the FRA.
12. The resident wrote to this Service on 9 November 2021 and said that although the landlord paid her compensation, it was yet to resolve the issues as it had not (at that time) provided the fire safety information. The resident also explained that the landlord’s promises to improve its communication had not materialised.

Assessment and findings

The landlord’s obligations

13. Under the lease, the landlord is responsible for the maintenance, repair and renewal of the structure and the common parts of the building.
14. The Regulatory Reform (Fire Safety) Order 2005 specifies that a “responsible person” for each building must conduct a Fire Risk Assessment (FRA), which identifies the measures to prevent fire and keep people safe.
15. In May 2018 (following Grenfell in June 2017), The National Fire Chiefs Council (NFCC) issued guidance to landlords of residential blocks with combustible cladding. The guidance advised landlords to temporarily change their evacuation strategies from ‘stay put’ to ‘simultaneous evacuation’ until combustible cladding had been removed. According to the guidance, the waking watch should only be removed when the required remedial works have been completed and a competent fire safety specialist certified it was safe to return to the ‘stay put’ strategy.
16. In June 2019, the Government issued an advice note on risks arising from balconies on residential buildings, regardless of height. The guidance set out that building owners were required to ensure buildings with balconies made of combustible materials were protected from the spread of external fires.
17. In December 2019, the Royal Institution of Chartered Surveyors (RICS), the Building Societies Association (BSA), and UK Finance agreed on a new industry-wide valuation process to help people buy and sell homes and re-mortgage in buildings above 18 metres (usually six storeys). Form EWS1 was introduced to reassure lenders that an expert had assessed external cladding. Form EWS1 was (at that time) required for buildings under 18 metres where balconies with combustible materials were stacked vertically, as with the resident’s property.
18. In January 2020, the government guidance was consolidated into the ‘Building Safety Advice for Building Owners’ which stated that “for the avoidance of doubt, building owners should follow the steps in this advice as soon as possible to ensure the safety of residents and not await further advice or information to act.” It added: “The need to assess and manage the risk of external fire spread applies to buildings of any height”. Following this advice, mortgage lenders also required an EWS1 for all buildings.
19. In July 2021, the Government issued a statement stating that EWS1 forms were not required for buildings below 18 metres.
20. The Ombudsman’s Spotlight Report on Cladding Complaints explains our approach to considering cladding-related disputes. While each case is considered on its own facts and circumstances, the guidance sets out three main questions:
    1. Has the landlord provided all residents with a clear roadmap for long-term compliance with the guidance?
    2. Has the landlord provided the residents with information to enable them to make informed decisions?
    3. How has the landlord responded to the individual circumstances of the resident?
21. On 22 January 2022, the Government withdrew the January 2020 advice note. There was no statutory or automatic obligation for landlords to conduct an EWS1 assessment or to provide copies of EWS1 forms to leaseholders.

Did the landlord comply with these obligations?

22. Under the NFCC guidance, the waking watch should have only been removed once the remedial works had been completed. The works started on 1 July 2019. The landlord accepted in its communication that the work had not been completed by August 2020, when the resident raised her complaint. However, the landlord removed the waking watch on around 9 March 2020, as evidenced by its communication with the residents. That was a significant failure as it was against best-practice and potentially increased the risk of harm to the residents of the building.
23. The risk of harm to the residents of the building was also confirmed in a safety inspection report commission by the landlord on 8 February 2021, which says: “The [complex] did not comply with Advice Note January 2020 in that the external walls and risers may allow rapid spread [of fire] and required remediation to provide an adequate level of fire safety to building occupants.”
24. The remedial works stalled for over two years. This is a failure in itself. The Ombudsman has carefully considered the reasons given by the landlord, namely that covid and the cost of labour since Brexit had increased. However, there is no evidence to demonstrate that the works should have taken as long as they did. There is no evidence that the landlord was using its best endeavours to ensure the timely completion of the works.
25. The Ombudsman’s Spotlight Report on Dealing with Cladding Complaints states, “Landlords must ensure that they are proactive in providing appropriate and timely updates regularly, at least once every three months, even where there is little or no change”. The landlord gave the residents four sets of dates for the work to restart. Each failed to materialise. The landlord did not provide sufficient and timely explanations of why the works had stalled or the reasons.
26. This Service has seen 46 requests from the resident asking why the remedial works had stopped and for a copy of the FRA between 9 March 2020 and 1 October 2021. The landlord referred this to its leasehold team on 1 October 2021 to confirm if it had a copy of the FRA. The landlord did not provide a copy of the FRA at this stage.
27. The landlord conducted a Fire Risk Assessment for the block in July 2019. Although the landlord was under no legal obligation to share the FRA with residents, it was a well-established best practice to provide residents with access to fire safety information. Resident engagement is integral to the success of a fire safety plan in residential buildings. The FRA is included in the leasehold reassignment pack and is not a commercially sensitive document. It was not appropriate for the landlord not to share a copy under the circumstances.
28. The landlord acknowledged, in its internal records, that whilst it had promised a contractor would be onsite to complete the works, it did not have a contractor and the works were (in its words) ‘back to square one’. The landlord’s internal email accepts the resident was not advised of this. However, the landlord did not convey this to the resident or offer an apology at the earliest opportunity. Landlords must recognise the value of acknowledging mistakes and apologising. This is important for the landlord-resident relationship, and failing to do so can undermine the landlord’s efforts to address the complaint.
29. Instead, when the landlord responded on 30 July 2021, it suggested it had provided the information but that the resident overlooked or misunderstood it. This was not the case. The email was the first time the landlord explained appropriately what had happened.
30. The landlord told this Service that it has since launched a new portal to improve communication with residents affected by cladding replacement. The Service requested to see an example, but the landlord submitted no evidence.
31. The Spotlight Report also says landlords should ensure that their policies and procedures are sufficiently flexible in responding to an individual’s situation and consider all the practical options that might help. That should include the landlord’s position on a reverse staircase, sub-letting and buy-back, and landlords should develop or amend policies where they do not exist. The landlord acted reasonably in allowing the resident permission to sublet the property. However, the Ombudsman asked the landlord for evidence that the landlord has a policy on when it will consider buying back shared ownership properties. No evidence was provided in response, and there are no details on its website concerning its position on a reverse staircase and buying back properties.
32. The Service recognises this is a complex and challenging situation for landlords. However, the Ombudsman expects landlords to consider what they can do to address individual circumstances and extend fairness across the sector. Landlords must show empathy for residents trapped in these circumstances through no fault of their own and seek to mitigate the impact where possible. Inaction or lack of compassion can undermine the landlord-resident relationship. The impact on residents’ financial or mental health may not be immediately visible, but they are no less impactful.
33. In this case, the resident’s ability to sell the property was likely to be affected by the delays in completing the works, the lack of fair communication and not providing the FRA, as well as its responses. There was, therefore, maladministration by the landlord in handling the replacement of cladding.

The associated complaint

34. In July 2020, this Service published the Ombudsman’s Complaint Handling Code, which set out the standards for handling of complaints. The Code (2020) states that landlords must:
    1. Confirm their understanding of the complaint; progress unresolved complaints under the timescales set out in the Code.
    2. Provide timely complaint responses:
       1. at stage one of the procedure within ten working days of the complaint being raised
       2. at stage two of the procedure within 20 working days of the escalation request.
    3. Address all points raised in the complaint and provide clear reasoning.
    4. Adhere to arrangements of frequency and method of communication, and keep residents regularly updated even where there is no news to provide.
    5. Acknowledge and apologise for any failure identified, explain, and, where possible, inform the resident of the changes made or actions taken to prevent the issue from happening again.
35. The resident first expressed her dissatisfaction on 6 August 2020. The complaint was escalated to stage one on 24 May 2021 only after 24 repeated emails from the resident, an intervention by the resident’s MP, and her direct email to the landlord’s chief executive office. Overall, the delay in accepting the complaint amounted to 202 working days. That is likely to have aggravated the situation, particularly as time was of the essence for the resident.
36. The landlord’s stage one response was issued on 8 June 2021, which was 211 working days after the complaint had been raised. The response was almost identical to its informal response from 6 August 2020. It did not address the resident’s requests for information. The landlord’s response ought to have been honest and clear that it was unable to say when the work would start and the reasons for that.
37. The complaint process should be used as a tool for reflection and learning to help resolve resident disputes at the earliest opportunity based on the Ombudsman’s three simple principles: be fair, put it right, and learn from mistakes. Landlords must ensure that responses provided to residents are specific and tailored to their questions rather than responding with standard content. Generic responses make residents feel they are not being listened to, which is something the complaints process is intended to address. The landlord’s response did not comply with these principles.
38. The landlord escalated the complaint on 28 June 2021. The resident sought clarification on what the landlord was going to consider at stage two of the procedure. The landlord did not let the resident know its understanding of the complaint so that she could offer more information. Consequently, this led to protracted communication between the parties about the remit of the complaint. This caused further distress to the resident, which was entirely avoidable.
39. Whilst the landlord initially said it would not offer compensation, as the issues were outside its control, it later offered the maximum amount under its policy in a final response letter on 30 July 2021.
40. The resident wrote to the Service on 9 November 2021 and said that the landlord’s communication had not improved despite paying her compensation. The resident said: “I know nothing more than I did two years ago when they stripped the cladding”.
41. When putting things right, landlords must carefully consider the impact on residents. This includes trying to put them into the position they would have been in had the landlord’s error not occurred. In this case, that should have been:
    1. Being candid about the failures and why they occurred.
    2. Informing residents of the progress of the works, or if it could not, explaining how frequently it would update the resident after the complaint response. Importantly, the landlord should keep to the scheduled updates.
    3. Considering what compensation should be paid to recognise any financial losses and distress, and inconvenience.
42. There is no evidence that the landlord fully considered the impact of the handling of the cladding, including:
    1. that the waking watch was removed before the works were completed
    2. the works remained outstanding for a significant time
    3. that the resident was not provided with the FRA in a timely way
    4. that the resident had to send significant correspondence over a prolonged period
    5. that some of the correspondence from the landlord was somewhat heavy-handed.
43. There is no evidence these factors were considered, and, therefore, there was severe maladministration by the landlord in handling the associated complaint.
44. Taken together, the landlord is responsible for severe maladministration in the way it handled and responded to the complaint.

Determination

45. I have determined that, in accordance with paragraph 52 of the Scheme,
    1. There was maladministration in respect of the landlord’s handling of the replacement of cladding; and
    2. There was severe maladministration in respect of the landlord’s handling of the associated complaint.

Orders and recommendations

Orders

46. The landlord’s Chief Executive Officer must apologise to the resident for its failures in its handling of the replacement of cladding and the associated complaint.
47. The landlord must pay the resident a further £500 compensation, made up as follows:
    1. £300 for the maladministration in its handling of the replacement of cladding.
    2. £200 for the severe maladministration in its handling of the associated complaint.

This is in addition to the previous compensation paid and must be paid to the resident within 28 days of the date of this determination.

Recommendations

48. The landlord should ensure all customer-serving staff familiarise themselves with the Ombudsman’s Complaint Handling Code, Dispute Resolution Principles, and our Spotlight Reports. Training is available on the Ombudsman’s website: https://hos.e-coach.co.uk.