Yorkshire Housing Limited (202201531)

REPORT

COMPLAINT 202201531

Yorkshire Housing Limited

8 September 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 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 handling of delays to the construction, and subsequent purchase, of the resident’s new build shared ownership property.

Background and summary of events

Background

The resident is a shared ownership leaseholder of a 3 bedroom house. He purchased a 35% share of the property on 18 March 2022. The landlord is the freeholder of the property.
The property was built by the landlord’s subsidiary development company in partnership with a house builder/construction company (the “contractor”).
At the time of the complaint, the resident had reserved a plot, however contracts had not been exchanged.

Policies, procedures and legal obligations

The landlord operates a two stage complaints process. Stage 1 complaints are responded to within 10 working days. Stage 2 complaints are responded to within 20 working days.

Scope of investigation

The development of residential property is subject to planning legislation and regulations, which are monitored and enforced by the local authority. It is a complex process and can be subject to delays due to unforeseen circumstances arising. The delays in this case were unexpected and were mostly due to a contamination issue found in the soil of some of the plots during construction in September 2021.
The contractor was responsible for formulating and leading on a remediation strategy which had to be submitted to, and authorised by, the local authority prior to the work taking place. The remediation strategy included the replacement of the soil to the affected plots. In this case, the landlord was not in a position to carry out the required work itself, it was reliant on the local authority to approve the remediation work, and the contractors to carry out the work, to effectively resolve the issue.
Overall, a landlord would only usually be expected to provide compensation if there was evidence that its actions, or inaction, led to the issue arising. There is no evidence to suggest the landlord, or its contractors, had any control over the construction delays. Therefore, this investigation will focus on and assess whether the landlord’s overall communication with, and responses to, the resident were appropriate, fair and reasonable in the circumstances of the case.

Summary of events

On 7 September 2021, the landlord’s contractor was informed that a potential contamination issue had been identified in the soil of some of the plots within the development.
The contractor worked in conjunction with a specialist engineering company, and the landlord, to carry out further tests to specific areas of the site. This was so a remediation plan could be agreed to resolve the contamination issues.
The landlord emailed the resident on 28 October 2021 to confirm that a soil test had been done to the garden of the plot he had reserved. The landlord said that the results were due back the following day.
The landlord emailed the resident again on 29 October 2021 and said that it did not have any news to give him as the soil test results had not come back. The landlord said that the results were expected by the following Tuesday. It apologised to the resident and explained that it did not know the reasons for the delay.
The resident contacted the landlord on 2 November 2021 to enquire as to whether the results from the sample testing had come back. The resident said that he was concerned as, if the results meant that the developers had to do some work, he only had 4 weeks before he had to be out of his current home.
The landlord responded on 4 November 2021. It said that it had received a report, however it did not have all the details. The landlord said that it would let the resident know if his plot was affected when the information was available.
The resident sent an email to the landlord following a telephone conversation on 4 November 2021. He said that he was disappointed to hear that the garden had to be pulled up and replaced. He said that he needed confirmation from the landlord that the work would be completed within the next 2 weeks, so that he could complete on the purchase by the end of November 2021. The resident said:
1. The property manager confirmed that it would only take about a week to complete the work, including the alterations to the part of the garden where the shed was, which was being done as a goodwill gesture. As the information had been provided by the property manager, he could see no reason why that date could not be honoured.
2. He could not move the date again as his tenancy had already ended. His landlord had allowed him to stay for another month whilst the problem was rectified. However, at the end of November, he would be homeless and temporary accommodation was not an option.
3. He was about to start a new role at the beginning of December which could impact his mortgage offer.
4. He expected to be in his new home by Christmas. He had been incredibly patient and accommodating, but he was concerned that he may potentially be homeless due to the delays.
On 8 November 2021, the resident requested that someone within the management team contact him to discuss a plan of resolution for the garden. He said that he wanted to know the details of the contamination, the work to be carried out, and a completion date. The landlord responded and said that it would ask a manager to give him a call.
A site progress meeting took place on 16 November 2021.
The landlord provided the resident with an update on 18 December 2021. It said the gardens down the right hand side of the development had been dug up, so progress was being made. It also said that there would be another build update in early January 2022.
The resident responded on the same day. He said that he had hoped that his property would be ready by the end of January 2022 as that was his move out date, as he could not get another extension from his landlord. The resident asked whether he would receive compensation for the delays.
The resident requested a further update on 10 January 2022. He told the landlord that he had to vacate his property on 29 January 2022 and that he had no further housing options available to him. The landlord responded on the same day. It told the resident to contact the designated development email address for an update.
The resident emailed the designated email address and requested an update. He explained that it was urgent due to his circumstances and he requested an urgent update and some reassurance.
The resident emailed the landlord on 14 January 2022. He said that he had not had any response to his emails and he had not had any update. His solicitor had also “hit a wall of silence”. The resident said that he had nowhere else to go as he had to vacate his property by 29 January 2022. The house had been sold and the new owner would no longer negotiate a further extension. He said:
1. Facilitating the decision to let him remain beyond 29 November 2021 had cost him upwards of £2,000. This was on top of his usual rent.
2. He was struggling to find any accommodation locally that would allow dogs, and the market was so inflated he had no choice but to pay 20-30% above market rent, and that was if he could find anywhere within 2 weeks.
3. He had costs associated with moving his furniture into storage, and utility companies were charging him excessive costs.
4. The contractor had promised him a completion date of October 2021, then November 2021. He was then given assurances that the end of January 2022 would be no issue. He was also promised amendments to the garden which had not been adhered to.
5. He had been incredibly patient and accommodating, but enough was enough. Building on contaminated land was bad enough but the lack of accountability from the landlord had been appalling, and disrespectful.
6. He needed definitive confirmation of when the property would be resolved to his satisfaction. He could not move accommodation every couple of weeks and he did not want to have to continue to escalate the matter.
The landlord responded on the same day and offered to give the resident a call. The resident was not available that afternoon, so the landlord arranged to call him the following day.
The resident sent a further email to the landlord on 15 January 2022 following a telephone conversation. He said that he had provided enough detail for the landlord and the developers to understand the situation they had left him in through the lack of due diligence, planning, and customer service. He said:
1. He was provided a guarantee that the property would be put right in time for a completion date at the end of November 2021. The original completion date was for the end of October 2021.
2. He had to go back to his current landlord to request an extension until the end of November 2021. As the proposed completion date got closer, he was informed by the landlord that November 2021 would not be possible, and he was not given a definitive timeframe. He was told that it could be the end of March 2022, however the end of January 2022 was more likely.
3. His current property was up for sale and the landlord had accepted an offer. He had to negotiate with the landlord, the proposed buyer, and their tenants, to facilitate an extension until the end of January 2022.
4. In addition to his monthly rent, which was more expensive than his new home would be, he had paid a further £2245 on “sweetening” the deal for the buyer and their tenants to allow him to stay until January 2022.
5. The landlord had not given him any notice of the further delays and he had nowhere to live. He had to borrow money off a credit card which resulted in his mortgage offer being declined because of the borrowing.
6. As he had just started a new job in December 2021, this left him in a difficult position. Thankfully, the mortgage provider was satisfied that his new role and salary were sufficient to accept. This was why he had been given an updated offer.
7. He had now been told that completion was expected in March 2022. The proposed buyer for his current home had threatened to pull out of the deal if they could not complete by 28 January 2022. Therefore, he had to find somewhere else to live, on a temporary basis, at an even further increased cost.
8. Due to the situation and the further costs, he could not afford to borrow more money off a credit card. His mortgage was at risk. He had sold his car to pay towards the deposit and to clear debt to satisfy the mortgage requirements. He was desperate to get a car and he could not borrow any further money until after completion.
9. The continued delays were significantly impacting on his financial situation and his overall independence. He had been without a vehicle since August/September 2021. The stress and anxiety he had experienced in trying to balance all these challenges was considerable.
10. The landlord had been appalling in even trying to empathise with his situation. It had been dismissive and condescending. He had entered into this in good faith, and he genuinely wished he was in a position to withdraw but he was not.
11. His compensation requirements were:
  1. £2245 for additional costs to extend and delay the sale of his current home.
  2. £500 for additional costs in rent for the next two months.
  3. £440 for 2 months storage.
  4. The contractor to commit to amending the garden as agreed in October 2021.
  5. The contractor to replace the turf with good quality artificial grass as a gesture of goodwill.
A further site progress meeting was held on 18 January 2022. It was confirmed that the contractor had completed the replacement of sub-soil to phase 1 and were progressing with the next phases over the next few weeks.
The landlord logged the resident’s correspondence of 15 January 2022 as a formal complaint. It sent a stage 1 acknowledgement letter on 24 January 2022. The landlord also contacted the resident on 24 January 2022 by telephone to discuss his concerns and required outcomes.
On 28 January 2022, the landlord contacted the resident to provide an update. It said that the sales and development team had met to discuss his case and the wider site. It was looking at how it could streamline and improve communication for the customers. It had met with the contractor and it now had a clear understanding of the requirements for the programme, and it would call the resident the following week with a further update.
On 1 February 2022, the landlord sent out an update letter to all purchasers. It said:
1. Late in the previous year, soil testing found minor levels of contaminates in more areas of the site than had originally been identified. Contaminants were not uncommon on sites and were dealt with by way of remediation recommended by qualified engineers. However, as contaminants had been found in more areas than originally anticipated, it had to remove the soil from the affected gardens and replace it with clean soil. This was a process which also required sign off by the local authority.
2. It was working closely with its engineers and testing laboratories to identify all the affected areas. This had to be done before the work could be undertaken as the remediation works had to be approved by the local authority.
3. It was working with all relevant parties to ensure that this happened as soon as possible to enable it to confirm a programme with estimated dates. Unfortunately, this meant that at this time it was unable to give any expected completion dates for any plots.
4. The ongoing implications of the Covid-19 pandemic and the UK’s withdrawal from the European Union had led to issues in both getting labour to site and delays in the delivery of some materials. Specifically roof tiles, timber, sanitary wear and windows on this site.
5. Any further plot specific updates, including estimated dates for completion, would be issued via solicitors.
6. It was working hard with its contractor and verification experts to ensure it could submit the required detail to the planning department to achieve the completion and sign off.
7. It was aware of the concern and inconvenience the delay was causing and it was sincerely sorry that it was unable to give any further information as to an estimated date for completion. It asked purchasers to consider the following options:
  1. Option 1, if purchasers wanted to cancel their reservation due to the site delays, deposits would be refunded along with any sale related costs incurred. If contracts had been exchanged, purchasers would be released from the contract at no cost.
  2. Option 2, if purchasers were able to continue, the reservation would be honoured without question, at the reserved price agreed.
8. For purchasers who wished to continue with the sale, and wait for a date of completion, updates would be provided every 2 weeks, or sooner if it had any news. Once the completion date had been confirmed, it would know the full extent of the delay and a good will gesture could be considered.
The landlord sent the resident a stage 1 complaint response on 2 February 2022. It said:
1. The resident had highlighted that he had incurred extra costs due to the build delays on the project. Yesterday, it sent out correspondence to all purchasers to provide an update on the build delays and offer customers the option to cancel the reservation (with associated costs and deposits to be refunded) or to continue with the sale. For those who wished to continue with the sale and wait for a date of completion, once it was aware of the full extent of the delays, a good will gesture would be considered.
2. The primary reason for the delay was the requirement for a further submission of the site remediation strategy and subsequent approval from the local authority. Contaminants were not uncommon on sites and they were dealt with by way of remediation, as recommended by specialist engineers.
3. During the construction period, the soil testing found minor levels of contaminates in some areas across the site. This meant that it had to change the way it remediated the site. It had to remove contaminated soil from the gardens and replace it with clean soil. Further approval was then required by the local authority.
4. It had been working closely with its engineers and testing laboratories to identify all the areas which were affected. This was required before any work could be carried out to remediate the affected areas and submit to the local authority for approval.
5. It was working with all relevant parties to ensure the work was completed as soon as possible to enable it to confirm a programme with estimated dates. Unfortunately, it was unable to provide any expected completion dates for any plots at this point.
6. The secondary reason for delay was due to difficulty in acquiring materials and appropriate labour. It had issues in getting labour to the site, and delays in the delivery of some materials from its supplier, specifically roof tiles, timber, sanitary wear, and windows. It was working hard with its contractor and verification experts to ensure it could submit the required detail to the planning department to achieve the completion and planning sign off of the resident’s home.
7. It appreciated that some of the responses the resident received were slower than expected. As a result of this, the sales team were going to set a service standard for replying to emails.
8. It understood that the resident was not happy with the responses from the landlord’s management team. Whilst it was frustrating to hear bad news and it appreciated that he was upset with the situation, from the investigation it found that the responses were reasonable and professional.
9. It would also be issuing frequent updates to all purchasers on the development to ensure that people were kept up to date.
10. The resident requested that astroturf was installed at his property. Unfortunately, this was not part of the specification. It would, however, commit to laying the additional paving to the rear of the shed as discussed.
The resident responded to the landlord on 4 February 2022. He said that he did not accept the response and he wished to escalate his complaint to stage 2. The resident said that he felt the landlord had been intentionally dismissive of his concerns, and that the response was designed to be antagonistic. The landlord acknowledged the resident’s escalation request to stage 2 of the complaints process on 9 February 2022.
On 11 February 2022, the landlord confirmed in an internal email that the remediation strategy had been submitted to planning. The resident’s plot had been remediated and new soil had been placed in the garden. The landlord asked the developer not to delay the validation reports as the resident needed to complete his purchase as soon as possible before his mortgage offer ran out. The landlord requested that the resident’s plot was split out from the rest of phase 1.
The landlord contacted the resident on 24 February 2022 to confirm that it was looking into his stage 2 complaint. The landlord apologised for the delay in responding to him and asked him to email his telephone number so that it could give him a call.
The resident contacted the landlord on 3 March 2022 as he had received information from his solicitors that the landlord’s solicitors would be in touch to confirm a completion date. The resident said that he had asked his solicitors to give the landlord’s solicitors a “nudge”. The resident asked if the landlord would push the solicitors from its side.
The landlord sent the resident a stage 2 complaint response on 4 March 2022. It said:
1. It apologised for the delays the resident had experienced in purchasing his home. It appreciated that this had been a stressful time.
2. It was doing all it could to enable him to move into his new home by the end of March 2022 and it wanted to complete the purchase as soon as possible. It was assured that the validation report for the contamination had been sent to its solicitors and that this could be shared with his solicitor.
3. The remedial work on the front garden was scheduled to be completed on 7 March 2022. As he had not exchanged contracts, it would be possible to serve papers once the work had been completed to the front garden. A completion date could then be agreed with his solicitor. It could not guarantee a completion date, although it could advise that it was aiming for completion by the end of March.
4. It understood that it had called to discuss the issues but did not ring back before sending out the response letter. It apologised for the oversight, and it would take the feedback on board as part of the learning from this.
5. It was providing fortnightly updates on the development to all customers and would continue to do so to ensure purchasers had regular updates about the site. It would contact the resident each week and would liaise with the sales and development team to get any updates. It said that the resident could ring directly on the mobile number provided should he need to.
6. It had looked into the feasibility of replacing the planned turf to the rear garden with astroturf. However, it would not be possible to do this as the provision of astroturf was not in line with its commitments to sustainability.
7. As discussed, once the sale was complete and the resident had moved into his new home, it would be happy to consider any claims he felt he had in relation to compensation payments.
The landlord emailed the resident on 9 March 2022. It said that the remedial work had been completed to the front garden. It had informed its solicitors accordingly so that they were in a position to serve papers to proceed with a view to completing by the end of March 2022. It asked the resident to push his solicitors as well.
The resident responded to the landlord on 14 March 2022. He thanked the landlord for its support in helping to get his purchase complete. He said that from a complaint perspective however, if the stage 2 response was a final response, then he would be escalating the matter. He said that he completely understood about the sustainability issue with regards to the garden, but there had not really been a resolution or acceptance of the monetary losses he had suffered. All he wanted was to bring the matter to a suitable resolution prior to moving in. Unfortunately, it seemed that he would not be able to settle into his new home as he would have to continue to fight the landlord for a proper resolution. He had not been provided with a definitive date for when the patio would be completed as per the agreement in the stage 1 response.
The landlord responded on the same day. It said it was glad that he was close to completing and getting excited about moving in. In relation to the stage 2 response, as advised, it would be happy to review any compensation claims once he had moved into his home and it had asked the sales team to do that.
On 14 March 2022, the landlord confirmed internally that the resident’s turf was complete and the flags behind the shed should be done for 16 March 2022.
In an internal email on 16 March 2022, the landlord confirmed that the contractors had installed an additional row of flags behind the resident’s shed. It confirmed on the 17 March 2022 that the resident wanted the full area flagged, and it was happy to fund the work from the scheme budget if the contractor could get it done as soon as possible. The landlord provided an update to the resident and said that it was seeking to confirm a date for the patio to be completed.
The resident completed his purchase on 18 March 2022 and the landlord paid compensation of £750 to him on 11 April 2022.

Assessment and findings

It is clear that the amount of time taken to resolve the matter was both distressing and frustrating for the resident. Particularly, as his previous tenancy had ended before his new property was ready for completion, which meant that he was concerned that he would be homeless for a period of time.
Residential developments are often subject to unforeseen delays. It is unfortunate in this case that the contamination issue was found close to the end of the project when the resident had a very limited period of time to complete his purchase. The landlord, however, cannot be held responsible for the resident’s living situation prior to the purchase of his property, as the only agreement in place between the landlord and the resident at the time was the reservation agreement.
This service has not had sight of the resident’s reservation agreement, however, from the evidence provided, there was nothing to suggest that the resident had been given a definitive date for completion by the landlord. Reservation agreements are usually a way for a purchaser to reserve their specific plot whilst the property is built. They do not guarantee that a property will be ready on a specific date or make provision for compensation if a particular date is not met.
The landlord’s initial communication with the resident from the time the contamination was discovered in September 2021 until around mid-November 2021, when the resident was informed that his garden was affected, was reasonable. The landlord kept in regular contact and provided updates where it could.
This service has not seen contact notes or any information that relates to the landlord’s telephone conversations with the resident. Therefore, it is unclear as to the extent of the conversation between the landlord and resident on 4 November 2021,or the information that he was given. The resident’s response suggests that either the landlord was not very clear on the likely effect of the contamination on the development, or he did not fully understand the impact the contamination would have on the development.
In either case, given that the resident asked the landlord for confirmation that his purchase would be completed within 2 weeks shortly after the telephone call, it should have been obvious to the landlord that the resident was not clear on the potential impact of the contamination, including the delays. It is unreasonable that the landlord did not ensure that the resident fully understood the gravity of the situation and the likely delays at this point.
The evidence provided by the landlord suggests that the landlord’s communication with the resident from mid-November until mid-January, when he made a formal complaint, was poor. The resident made attempts to obtain updates and explain to the landlord that he needed the information due to his housing situation, but the landlord did not respond to his concerns about his current tenancy end date.
It is clear that the resident’s housing situation was not the responsibility of the landlord in this case. However, by not responding to, or acknowledging, the resident’s concerns, the landlord appeared to be unsympathetic to his situation.
The landlord did provide a detailed update to all purchasers on 1 February 2022. It offered purchasers the option to cancel their reservation and receive a full refund, along with any sale related costs, or to continue at the agreed reserved price. The landlord also agreed to provide purchasers with an update every 2 weeks going forward. This approach was reasonable in the circumstances, although the resident’s position meant that he had little option but to continue with the purchase.
The landlord’s stage 1 response mainly re-iterated the general update sent to all purchasers the previous day. The landlord did not specifically address the resident’s concerns. This was an impersonal response and likely contributed to the resident’s frustration and distress.
The response did, however, accept that the landlord’s communications with regard to the resident’s concerns had been slower than expected. It also said that it would introduce a service standard for replying to emails as a result of the resident’s complaint. However, although the landlord identified a service failure and demonstrated learning, it did not offer any redress to the resident, which was unreasonable.
The landlord did instruct the contractor to split the resident’s property out from the rest of phase 1 in an attempt to complete the purchase prior to the resident’s mortgage offer expiring. This was reasonable and showed that the landlord had taken on board the resident’s concerns and situation. It also showed that it was doing all that it could, in the circumstances, to enable him to complete his purchase before his mortgage offer ran out, even though it was under no obligation to do so.
The stage 2 response apologised to the resident and said that it would consider his compensation claim after the completion of the sale. It is unclear why the landlord delayed the consideration of compensation until after completion, especially given the resident’s circumstances. It would have been reasonable for the landlord to consider compensation at the time of the complaint, and then revisit this after completion to ensure that adequate compensation had been given. The landlord eventually paid the resident £750 in compensation, although it is unclear exactly what the compensation was for.
Where there are admitted failings by a landlord, the Ombudsman’s role is to consider whether the redress offered by the landlord put things right and resolved the resident’s complaint satisfactorily in the circumstances. In this case, the landlord attempted to put things right by apologising to the resident and by offering compensation and funding additional paving in the garden area.
The landlord’s offer of £750 compensation, additional paving, and its apology represented reasonable redress for the identified failings. In the Ombudsman’s opinion, the landlord has been able to evidence it made reasonable and proactive efforts to resolve the complaints and “put things right” in accordance with the Ombudsman’s Dispute Resolution Principles.
In summary, although there were failings in the way the landlord communicated with the resident regarding the delays, the landlord attempted to put things right after the completion of the sale. The redress offered by the landlord was reasonable in the circumstances. It was within the range that the Ombudsman recommends in its remedies guidance for service failings that have had a significant physical and/or emotional impact on a complainant.
As the landlord has already offered this amount, it is therefore to pay the £750 compensation offered if it has not already done so. The finding of reasonable redress is dependent on the compensation being paid.

Determination (decision)

In accordance with paragraph 53(b) of the Housing Ombudsman Scheme, there was reasonable redress by the landlord for the failings in the way it handled the delays to the construction, and subsequent purchase, of the resident’s new build shared ownership property.

Reasons

The landlord was not responsible for the resident’s housing situation prior to his purchase of the property. It was under no obligation to complete the property by a specific date or provide compensation due to the construction delays. The delays were unforeseeable and could not be attributed to the landlord or its contractors.
The landlord’s complaint responses recognised its failings in relation to its communication with the resident and it apologised to him. The overall offer of £750 compensation was fair and reasonable given the circumstances of the case.

Orders and recommendations

Recommendations

It is recommended that the landlord should:
1. If it has not already done so, pay the resident the £750 compensation it offered.
2. Update the resident, and this service, on the improvements in its communications with purchasers, committed to through the complaints process.
The landlord should reply to this Service within four weeks of the date of this report to advise of its intentions in regard to the above recommendation.