Peabody Trust (202127649)

REPORT

COMPLAINT 202127649

Peabody Trust

29 July 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 complaint is about the landlord’s decision to calculate the premium for extending the lease using a property valuation it had obtained rather than one the resident had arranged.

Determination (jurisdictional decision)

What the Ombudsman can and cannot consider is called the Ombudsman’s jurisdiction. This is governed by the Scheme. When a complaint is brought to this Service, the Ombudsman must consider all the circumstances of the case, as there are sometimes reasons why a complaint will not be investigated.
After carefully considering all the evidence, this Service has determined that the complaint, as set out above, is not within the Ombudsman’s jurisdiction.

Summary of events

The resident’s solicitor wrote to the landlord on 19 March 2021 and advised that the resident had accepted an offer to sell her 60% equity in the property. The solicitor advised that it had obtained its own valuation of the property in relation to the sale and this was lower than the valuation obtained by the landlord in relation to extending the lease. (The process of extending the lease was running at the same time as the property sale).
The resident’s solicitor wrote to the landlord on 25 March 2021 and queried the valuation that the landlord’s surveyor had used to calculate the premium payable for extending the lease.
The landlord wrote to the resident on 22 April 2021 setting out the terms on which it was prepared to extend the lease of the property by 90 years.
The resident submitted a complaint to the landlord on 28 October 2021 as she stated that the landlord had failed to respond to her solicitor’s letter dated 19 March 2021.
The resident’s solicitor wrote to the landlord on 25 February 2022 and referred to a complaint the resident had submitted on 28 October 2021. The solicitor stated that it had not received a response, despite forwarding a copy of the resident’s complaint to the landlord on 3 November 2021 and sending a reminder on 15 December 2021.
On 1 March 2022, the resident contacted this Service and stated that the landlord had not responded to her complaint dated 28 October 2021.
The landlord sent its stage one reply on 2 November 2022 regarding her complaint that it had overvalued the property when calculating the cost of extending the lease. The landlord outlined the process it had followed, including arranging for a Royal Institution of Chartered Surveyors qualified surveyor to carry out the valuation and determine the premium for a 90-year extension of the lease. The landlord concluded there had not been any service failure in the process it had followed. However, it stated that it had not registered a complaint received from the resident’s solicitor on 3 November 2021 and apologised for this. The landlord said it had carried out further staff training on record keeping and offered the resident £100 compensation.
On 10 November 2022, the resident wrote to the landlord in response to its stage one letter and stated the following:
1. The resident said that the landlord had “ignored” her complaint and the letter from her solicitor.
2. She had accepted the landlord’s offer as she could not afford to lose the buyer for the property. She had therefore lodged a formal complaint after the completion of the sale.
3. The resident said that the various issues raised by her solicitor had financial implications for the landlord and her.
The landlord sent its stage 2 complaint reply on 5 December 2023 in which it stated the following:
1. The landlord had reviewed its stage one response which had been sent to the resident on 2 November 2022 and apologised for the level of service that the resident had received in relation to the complaint handling. However, it was satisfied that the information and overall response it had provided at stage one had been correct.
2. It upheld the complaint due to the service failures throughout the complaints journey. In particular, the landlord apologised that it had failed to log the resident’s stage one complaint, which resulted in the resident approaching the Ombudsman. It also apologised for failing to act when the resident had requested the landlord to escalate the complaint to stage 2 and for the lack of response to her solicitor.
3. The landlord said it was unable to agree the resident’s request for her to be reimbursed for her expenses in pursuing the matter. However, it offered compensation of £450, made up of £150 for time, trouble and inconvenience and £300 for complaint handling.
The resident wrote to this Service on 22 December 2023 and stated that the landlord’s stage 2 reply had not dealt with the substantive issues relating to the valuation of the property.
The resident informed this Service on 20 February 2024 that she sold the property in August 2021 and outlined the outcomes she was seeking from the Ombudsman’s investigation. The outcomes included financial redress of the difference in value between the landlord’s valuation and that of her surveyor. She stated that she was also seeking costs towards time, trouble, distress and inconvenience in bringing her complaint.

Reasons

Paragraph 42f 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 resident contacted this Service on 20 February 2024 and outlined the areas of her complaint, which were:
1. That the valuation of the lease extension carried out by the landlord’s surveyor was an overvaluation and not a fair valuation.
2. That the valuation of the lease extension carried out by her surveyor was a fair valuation, taking into account the evidence provided by the estate agent who marketed the property.
3. That the landlord did not take into account the evidence presented to it by the resident’s surveyor and the estate agent when assessing a fair valuation.
4. That the landlord did not give the evidence from the resident’s surveyor and the estate agent proper and/or full consideration.
5. The resident therefore stated she was seeking financial redress based on the difference between the landlord’s valuation and that of her surveyor.
Resolving such a complaint requires a binding decision about whether the landlord’s actions resulted in any liability for the financial loss the resident states she incurred. It would also require an assessment to quantify any financial loss. The Ombudsman does not have the power to issue binding decisions about liability, nor does this Service have the necessary expertise to quantify financial loss in these circumstances. The courts have the power to issue binding decisions about liability and have the necessary expertise to quantify financial loss in these circumstances.
The Ombudsman has therefore determined that the resident’s complaint is best suited for consideration by a court and is not one that the Ombudsman can investigate. The resident may wish to seek independent legal advice about making a claim in the courts if she wishes to pursue this option.