Town and Country Housing (202100667)

REPORT

COMPLAINT 202100667

Town and Country Housing

August 16 2021

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 handling of the resident’s:

1. Reports of a leak in the roof of her property, and the landlord’s decision not to investigate the cause of the issue.
2. The landlord’s handling of the resident’s complaint.

Background and summary of events

2.     The resident is currently a shared owner. She lives in the house with her children. The property was built by a private construction company and the landlord took handover on 5 November 2008.

3.     The resident initially rented the property under the ‘Rent to Homebuy Scheme’ from 25th March 2011 to 15 December 2016. She then purchased the property under the shared ownership scheme on 15 December 2016

4.     The terms of the shared ownership lease with regards to repairs are that the shared owner is responsible for repairs and maintenance to the property other than those items covered by buildings insurance.

Lease Covenants

5.     The leaseholder’s covenant includes:

Repair

1. “To repair and keep the premises in good and substantial repair and condition (except in respect of damage by risks insured under Clause 4.2 (Insure) unless the insurance money is irrecoverable by reason of any act or default of the Leaseholder)”.

6.     The landlord’s covenant includes:

Insure

1. “At all times during the term (unless such insurance shall be cancelled, invalidated or revoked by any act or default of the leaseholder) to keep the premises insured against loss or damage by fire and such other risks as the landlord may from time to time reasonably determine or the leaseholder or the leaseholder’s mortgagee may reasonably require in some insurance office of repute to its full reinstatement value (including all professional fees in connection with any reinstatement and two years’ loss of rent) and whenever required will produce to the leaseholder the insurance policy and the receipt for the last premium and will in the event of the premises being damaged or destroyed by fire or other risks covered by such insurance as soon as reasonably practicable make a claim against the insurers and lay out the insurance monies in the repair, rebuilding or reinstatement of the Premises”.

Insurance Cover

7.     The property was subject to an NHBC insurance certificate to cover build defects up to £4 million stated to be valid from October 2008 until the end of September 2020.

8.     Further to the obligation on the landlord to insure the premises as set out above the landlord took out an insurance policy with well-known insurers.

The Complaints Policy

9.     The complaints policy is stated to apply to all customers of the landlord and any individual or group affected by the services the landlord provides. It is expressly stated that “A resident or customer does not have to use the word complaint for it to be treated as such”. A complaint is defined as “an expression of dissatisfaction, however made, about the standard of service, actions or lack of action by the organisation, its own staff, or those acting on its behalf, affecting an individual resident or group of residents”. However, it is said that certain scenarios are not considered to be complaints.  These include: an initial request for a service or for information or an explanation and insurance claims and appeals, which will require referral to the relevant insurers.

10. It is also stated that the landlord “positively welcomes feedback in the form of complaints from anyone who is affected by a service we provide, or a decision made by us, including: Leaseholders and Shared Owners”.

 

The Complaints Procedure

11. The landlord’s Complaints Procedure states that a complaint may be made where:

1. There has been a failure of published service standards, and where action has not been taken within agreed timescales.
2. The landlord has not acted in line with policies and procedures to a customer request.
3. There has been poor conduct by staff or landlord’s agents/contractors.

12. The landlord’s complaints procedure is said to be comprised of two stages.  Stage 1 is an investigation carried out by an appropriate member of staff from the relevant service area. If the complaint is escalated to Stage 2, an independent review is to be carried out by a senior manager from the Leadership Team not connected to the service area complained about.

13. It is said that any dissatisfaction raised concerning the content of the landlord’s policies, procedures or responsibilities will not be “raised as a complaint but will be used as feedback”.

Summary of events

14. The landlord’s correspondence suggests that the resident first complained of a leak at her property in the autumn of 2018 and this was referred to insurers. On 11 September 2018, the claims handler for the insurers wrote to the resident to say that they had received a leak detection report. The report advised that the escape of water was from defective seals and grouting around the bath / shower which had resulted in damage to the bathroom flooring. The damage was said not to be the result of a one-off insurable event but the result of a lack of maintenance so there was no cover under the policy and the claim was declined in full.

15. The landlord’s correspondence indicates that a conversation took place between the resident and the landlord on 12 September 2018 which the landlord’s Homeownership Manager (HOM) followed up with an e-mail. This explained that she and the landlord’s insurance officer had looked through the report submitted by the leak detection specialists which stated that the tiles required re-grouting, the mastic seal around the bath needed to be replaced and the broken tiles needed to be fixed. She explained that all these items were deemed to be maintenance and fell within the resident’s responsibilities as the homeowner so the landlord could not be held responsible.

16. From the landlord’s records it appears that the next time the resident approached the landlord regarding a leak was on 18 February 2021, on this occasion about a leak in the roof. The resident explained that she had recently discovered that there was a problem in her loft. She said there had been a nasty smell upstairs for a while, but she had not been able to pinpoint the issue. However, in the previous week she had gone up into the loft to put a couple of boxes there and had seen the cause of the smell, namely “rotten mouldy wooden loft beams”. She said she had had three different people attend the property to assess the problem, and that they had all said different things, but one of the most worrying diagnoses was that it could be a leak from the lead running along the roof, which would have been installed when the house was constructed. She reported that the damp and mould had spread to her son’s bedroom and her new bathroom.

17. The resident also said that she had spoken with the insurers who had told her that the landlord needed to assess this as it could be a structural problem dating back to when the house was built. The resident mentioned that she knew that the new builds in the area had a history of roof imperfections which led her to be concerned that her property may have been overlooked when repairs were undertaken a few years ago on neighbouring properties. She emphasised that this was causing her worry and mentioned upset and distress at having to throw some sentimental items away.

18. The resident also made a complaint on the same day. In this she expressed dissatisfaction that the landlord was not willing to cover the work and to accept her view that the building itself and anything built into it was the landlord’s responsibility to fix. She said she had proof that the wrong wood had been fitted on to her house and stated that the original felt did not cover the roof, the lead had been laid so that it overlapped too much causing water ingress which in turn had caused the wood to go mouldy so that it was potentially unsafe. She expressed the view that as a shared owner the rent she paid monthly meant that anything that went wrong on her building should be covered under home insurance that the landlord should have taken out on her behalf. A recovery claim should then be made against the original contractor who built the house regardless of whether the property is in warranty or not. She said she had clear pictures showing that the house had not been built properly. She mentioned that she had contacted the landlord on numerous occasions to be told that they would not be covering the issues she had previously reported causing her to pay out thousands of pounds over the last couple of years. She asked to be contacted within 48 hours or she would escalate the complaint.

19. A response was sent by the HOM on the same day. She explained that she was sorry to hear of the issue but as the resident was aware from conversations with herself and members of her team, as a leaseholder, the resident was fully responsible for the repairs and ongoing maintenance of her property, which included the roof space. She explained that the property was built ‘circa’ 2008 and therefore the NHBC warranty which covered any structural defects had expired. Any repairs required would be for the resident to arrange and pay for. She attached a copy of the certificate to demonstrate that it expired in September 2020. She expressed regret that the landlord was unable to assist and said that if insurers were advising that the issue was not covered by them then the landlord could not assist further.

20. On 19 February 2021 the HOM emailed further to say she noted the resident’s request for the issue to be raised as a complaint but having reviewed the request and the complaints procedure, she did not believe that what the resident was requesting was a complaint, as there had been no service failure. A link to the complaints’ procedure was sent. It was explained that since the resident purchased the property in December 2016, she became the person fully responsible for repairs and maintenance for the whole of the property as set out in the lease, which was attached for ease of reference. She further explained that the building insurance did not cover repairs and maintenance as these are the leaseholder’s responsibility. The resident was advised to seek legal advice. It was also reiterated that the 10-year insurance with the NHBC had expired so it was no longer possible to pursue any potential defects through this insurance. She said that it had been explained that the landlord had a responsibility only for the estate area detailed in the resident’s lease for which she paid service charges. The HOM concluded that she did not uphold the complaint.

21. The resident subsequently, on 9 April 2021, approached the Housing Ombudsman Service (HOS). This service shared the resident’s concerns with the landlord on 9 April 2021.

22. On 11 April 2021 the HOM responded to the Ombudsman attaching the original complaint response dated 19th February 2021. The HOM explained that on reviewing the case it had been noted that an escalation route for the complaint had not been provided. It was explained that this was because when dealing with the complaint, it was determined that, as the repair being requested was the leaseholder’s responsibility, it did not constitute a complaint. The e-mail explained the history of the resident renting and then purchasing. It explained that the terms of the shared ownership lease were that the shared owner was fully responsible for all repairs and maintenance to the property (other than those items covered by the building insurance). It said that when the resident first raised concerns over a possible leak from her roof she was advised of her obligations and sent details of the insurance to check if it was covered. Whilst the resident had advised that she had had various people to look at her roof, she had not provided any evidence of this by way of a report to clarify exactly what the issue identified was. The HOM explained that the resident had contacted the building insurers to make a claim for damage to the bedroom ceiling and attached the reports which had been provided to the resident by the insurer.

23. The landlord continued to say that the resident had rung again after receiving the reports to ask what the landlord would be doing to replace her roof and the landlord reiterated the advice given in February 2021 regarding the lease obligations.  Since the resident was adamant that it was the landlord’s responsibility, the HOM had sought advice from the landlord’s Asset Manager who deals with any latent defect cases. His advice was that the resident needed an assessment of the property by a suitably qualified professional with findings and recommendations set out in a written report since all there was to date was conflicting anecdotal information from third parties who may have little understanding of the repairing obligations of the parties concerned. He therefore suggested that the resident appoint a building surveyor to investigate and report on the defects to obtain an accurate diagnosis of the defects and an informed opinion on the remedy and likely cost which would help inform next steps. He expressed the view that “A latent defects claim is the last resort. It is potentially lengthy and costly with no guarantee of a successful outcome. If we had a widespread problem across this development, it might be the route to take, but we believe this to be localised to this property. Ultimately though this is a matter for the resident to prove and not for us to disprove”.

24. It was also explained in the response that after speaking to the resident, the HOM had requested copies of the reports that the insurer had sent to the resident. Upon receipt, she discussed these with the Insurance Manager who liaised with the insurer to request clarity from them. Advice was sought from an independent insurance advisor, and both stated that the water ingress was not a one-off insurable event but was possibly due to one of three reasons: wear & tear, poor workmanship, or ventilation issues, none of which were insured perils. Since the lease stipulated repairs and maintenance were the responsibility of the shared owner, they stated that they believed that the resident needed to instruct a suitably qualified Surveyor to inspect the roof and advise exactly what the issue was and what works were required or alternatively instruct a roofing contractor to establish where the water was coming from and advise her what works were required to the roof.

25. In response to the resident’s specific complaint, the landlord explained to the resident (and this service) that:

1. The report obtained did not state that the roof needed replacing but suggested further investigation. It had not been established that the property had not been built properly but even if this were to be established, the NHBC warranty had expired so a claim could not be made against the original builder. There was no record of other properties at the scheme having any issues with the roof other than routine repairs and maintenance which the landlord had carried out to the properties.
2. Regarding the earlier leak, which the resident alleged was from pipes which were not correctly connected, the insurer had investigated this at the time and the source of the leak was not deemed to be down to poor workmanship but due to a lack of maintenance.
3. With regards to the bedroom, the insurer’s report stated that dampness was due to ventilation/ condensation issues and not related to an ingress of water.
4. Regarding the resident’s children being worried their bedroom ceilings may fall through due to the condition of the roof, the insurer’s report did not substantiate this.

26. The landlord had suggested that the resident could seek further clarification from a solicitor or Citizens Advice Bureau (CAB). The landlord stated it had tried to explain and discuss the situation with the resident on more than one occasion, but the resident was reluctant to accept responsibility.

27. On 30 April 2021 this Service wrote to the landlord pointing out that a final response had not been issued to the resident and asking the landlord to provide a final response by 17 May 2021.

 

28. The HOM subsequently wrote to the resident on 14 May 2021 with a final response. She explained:

1. When the resident first raised concerns over a possible leak from her roof, she was advised of her obligation to repair and maintain the property and sent the details of the insurance to see if it was covered. The resident had advised that she had had various people to look at the roof but had not been able to provide any evidence of this by way of a report to clarify exactly what the issue identified was. The property was covered under the building insurance the landlord was obligated to take out on her behalf as required by the lease.
2. The resident had contacted the building insurers to make a claim for damage to the bedroom ceiling. The insurers had investigated and provided the resident with their reports and recommendations. After the resident received the reports, she rang on 8th April 2021 to ask what the landlord would be doing to replace the roof. At the time of this conversation the HOM had not seen the report/s so reiterated the advice given in February 2021 regarding the lease obligations.
3. As the resident had been adamant that it was the landlord’s responsibility, copies of the reports were requested and discussed with the Insurance Manager who liaised with the insurer requesting clarity from them. The landlord/ insurer also sought advice from an independent insurance advisor. Both stated that the water ingress was not a one-off insurable event but is possibly due to one of three reasons: wear & tear, poor workmanship, ventilation issues, none of which are insured perils.
4. She had sought advice from the landlord’s Asset Manager who dealt with latent defects and was advised that consideration of any claim had to be based on an assessment of the property by a suitably qualified professional with findings and recommendations set out in a written report. It was therefore recommended and agreed with the insurers that the resident needed to appoint a suitably qualified independent building surveyor to investigate and report on the cause.

 

29. The HOM explained that as the resident’s dissatisfaction was about the maintenance of the property which the resident was responsible for, she had determined that it was not a complaint. With additional information from the insurer reports and without sight of a suitably qualified independent building surveyors report on the roof, the landlord’s position had not changed.

Assessment and findings

Reports of leak in the roof and not accepting liability to investigate the cause

30. It is clear from the lease that repair and maintenance of the property is the leaseholder’s responsibility. The lease specifically states that the resident is to repair and keep the premises in good and substantial repair and condition (except in respect of damage by risks insured under Clause 4.2 (Insure) unless the insurance money is irrecoverable by reason of any act or default of the Leaseholder).

31. It is not clear whether this was explained to the resident when she purchased the property, but her legal representative should have advised her of this in any event. It is clear from the correspondence that the landlord did explain this to the resident in 2018 when there was an earlier issue with dampness so the resident should have been aware of the position before 2021. It appears from correspondence that this was explained again by the landlord in 2021, and that they sent a copy of the lease and an extract of the relevant covenant for ease of reference.

32. The report compiled by workmen who attended, does not give a definitive conclusion as to the cause of the water penetration. The report indicates that the issue appears to be a mixture of wear and tear, possible storm damage and poor initial design or quality with insufficient ventilation.

33. The landlord did facilitate the resident referring the issue to insurers, though it appears it did not as per the covenant in the lease refer the claim itself. The landlord and the insurer did go to some lengths to check the position by engaging an independent insurance advisor. The insurer and insurance advisor also mentioned the above three possible causes of the problem when they carried out an investigation. It appears that the resident was advised by both the landlord and insurer that the way forward was to obtain a surveyor’s report. She did not follow this advice so a definitive answer as to the root cause of the dampness was not found.

34. It would appear from reports available to date that the landlord was correct in its analysis that it was not responsible for roof repairs or maintenance but the reports available did indicate some potential design and build quality issues. The landlord was correct in its analysis that the NHBC insurance certificate regarding the building had expired before the resident complained in 2021, though it appears the resident was correct that this spanned 12 year rather than 10 as it was valid from October 2008 to end September 2020.

35. It was not unreasonable that the landlord did not consider making a latent defect claim itself, as it was of the view that a latent defect claim was a last resort and a potentially lengthy and costly process with no guarantee of a successful outcome. It was suggested that if there was a widespread problem across the development, it might be the route to take, but the landlord asserted that the issues were limited to the resident’s property. Although the resident alleged that it was a widespread problem and that works had taken place in the past to other properties, no proof of this was offered. The landlord confirmed to the Ombudsman Service that it had only carried out general repairs and maintenance to other properties through obligation on the mixed tenure scheme.

36. The landlord could potentially have double checked whether there were more widespread design issues and explored the latent defect issue further since a claim could potentially be made up until 3 years after discovery of a defect. However, the landlord did advise the resident to seek legal advice and had she done so she might have been advised about making a claim in respect of any latent defect. The landlord could have explained the situation regarding latent defects more explicitly and/or offered signposting to appropriate surveyors. It could have considered a joint expert though it was not obliged to. Overall, the landlord’s action and/or inaction with regards to the reports of leak or dampness to the roof did not amount to a service failure. It acted in accordance with the lease and policies.

The landlord’s handling of the resident’s complaint.

37. There are several issues arising with respect to the landlord’s handling of the resident’s complaint. Firstly, in the e-mail responding to the resident’s complaint the landlord’s manager states that having reviewed the request and the complaints procedure, she did not believe that what the resident was requesting was a complaint, as there had been no service failure. However, the complaints policy at the outset defines a complaint as “an expression of dissatisfaction, however made, about the standard of service, actions or lack of action by the organisation, its own staff, or those acting on its behalf, affecting an individual resident or group of residents”. The resident was expressing dissatisfaction, so this appears to be within the landlord’s definition of complaint.

38. In the complaints procedure document, a complaint is defined slightly differently (as set out above at paragraph 11) and the resident’s complaint might not fall into the categories described, other than potentially subparagraph c). The differing definitions in the policy and procedure documents could be confusing for residents.

39. The policy also says that the landlord “positively welcomes feedback in the form of complaints from anyone who is affected by a service we provide, or a decision made by us, including: Leaseholders and Shared Owners”. Even if the issue was not a complaint under the policy or procedure, the landlord does not appear to have positively welcomed the resident’s feedback. There is no evidence of it being captured and utilised.

40. The Ombudsman’s complaints handling code states that a landlord shall accept a complaint unless there is a valid reason not to do so. Further it states that a complaints policy shall clearly set out the circumstances in which a matter will not be considered, and these circumstances should be fair and reasonable. It should be noted that the complaint the resident raised was not just about insurance and the insurer declining cover but about wider issues including build quality and design and the landlord’s decision not to accept liability.

41. There is also some ambiguity about whether the landlord is treating the concerns as a complaint or not. It is unclear if the complaint was then recorded as such on the landlord’s internal system in accordance with its policies and procedures.

42. Furthermore, the landlord’s response is said to be final, but no reference is made as to where the resident can take the issue if she remains dissatisfied. In the landlord’s own policy, it is stated that a complainant should be advised of steps that they can take if they remain dissatisfied with the outcome at Stage1. The Ombudsman’s complaints handling code states that in the final decision the landlord’s policy shall include the right to refer the complaint to HOS either through a designated person within eight weeks of the final decision or directly by the resident after eight weeks. Therefore, the landlord’s response did not comply with its own policy or the Ombudsman’s complaints handling code.

43. The later e-mail to the resident of 17 May 2021 after the Ombudsman’s intervention mentions Stage 2; “This now concludes stage 2 of our internal complaints process”. However, the issue was not dealt with in line with the published procedure for stage 2. This says that if escalated to stage 2 the Regional Operations Manager will allocate the case to a member of the Leadership Team from an area of the business not connected to the service area complained about. However, a member of the leadership team did not consider the complaint as the response came from the HOM. Therefore, the complaint does not appear to have been escalated.

44. The landlord awarded no compensation in respect of complaints handling failures. However, based on the evidence that has been provided to the Ombudsman and the failings identified, this lack of award was not proportionate in the circumstances.

Determination (decision)

45. In accordance with paragraph 54 of the Scheme, there was no maladministration in respect of the landlord’s handling of the resident’s reports of a leak in the roof of her property, and the landlord’s decision not to investigate the cause of the issue.

46. In accordance with paragraph 54 of the Scheme, there was service failure in respect of the landlord’s handling of the resident’s complaint.

Reasons

47. The Ombudsman has considered the lease and cannot see that the landlord was responsible for the repair to the resident’s roof/wooden boundaries. It was therefore appropriate that the landlord advised the resident of this and was not unreasonable that it did not take it upon itself to investigate the matter to identify the root cause. It was appropriate that the resident was directed to the insurer and advised of the expiration of the NHBC warranty.

48. The landlord’s handling of the complaint departed from its Complaints policy. Some of the complaint correspondence was confusing; and as a result, the complaint stages were unclear, and the resident was not advised on how she could escalate matters if she remained dissatisfied with the landlord’s response. The resident was only advised of this after the Ombudsman’s intervention.

Orders and recommendations

Orders

49. Within four weeks of the date of this determination, the landlord should pay the resident a total of £100 compensation for to reflect its handling of the resident’s complaint.

Recommendations

50. Should the resident wish to pursue the developer/builder herself, the landlord should advise the resident of the name of the developer/builder of the property if it has not already done so.

51. The landlord should be mindful about using jargon when corresponding with the resident.