London & Quadrant Housing Trust (L&Q) (202227632)

REPORT

COMPLAINT 202227632

London & Quadrant Housing Trust (L&Q)

25 November 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

1. The complaint is about the landlord providing incorrect information about the length of the lease of the resident’s property.

Background

2. The resident is a shared ownership leaseholder. The property is a 2-bedroom flat, of which the resident owns a 25% share. The landlord is a housing association.
3. The landlord is not the freeholder of the property but holds the head lease.
4. In, or around, August 2021 the resident approached the landlord about selling the property. The resident’s lease required them to sell the property through the landlord unless it waived its nomination rights and allowed the resident to sell on the open market.
5. On 26 October 2022 the resident made a stage 1 complaint. They said:
   1. During the selling process for their property the landlord had provided incorrect information about the duration of the lease.
   2. The landlord had now told them that it could not proceed with a shared ownership sale as the remaining lease duration was less than 80 years. It had advised them to extend the lease or place the property on the open market. They stated the landlord should have advised them of this at the outset of the sale.
   3. The landlord’s error had resulted in an extensive and unnecessary delay and caused them significant and unwarranted expense. They stated they no longer had the financial means to extend the lease or place the property on the open market for a potentially prolonged period.
   4. They requested the landlord considered buying back their share of the property.
6. The landlord issued its stage 1 response on 8 November 2022. It said:
   1. It had originally advertised the property as having a 999-year lease, but that it was now aware of the correct lease duration. It confirmed it could not proceed as a shared ownership sale.
   2. It apologised for the error and accepted this had delayed the sale of the property. However, it said that had the correct information been known in 2021 it still would not have been able to proceed with a shared ownership sale and the resident would have needed to sell the property on the open market.
   3. It advised it did not consider the resident’s property met the criteria under its voluntary buy back policy.
   4. It would refund the monies paid by the resident for their valuation report. It asked the resident to provide confirmation of the amount paid so it could arrange the refund.
7. On 4 December 2022 the resident escalated their complaint to stage 2 of the complaint process. They said:
   1. The landlord’s error was a mistake that should have been easily avoidable if it had taken appropriate care. They believed its actions amounted to negligence.
   2. They disagreed with the landlord’s view that the outcome would have been the same if the error had not happened. They said the error had denied them the opportunity to place the property on the open market in 2021.
   3. They had incurred costs since the start of the sales process which had resulted in them accruing a significant level of debt. This was causing them a great deal of stress and anxiety.
   4. In 2021 they would have been able to afford a lease extension if the landlord had told them it was necessary. They reiterated they no longer had the financial means to extend the lease or place the property on the open market for a prolonged period.
   5. They had noted the information about the landlord’s buy back policy, but believed their situation was an exceptional circumstance and requested it review their decision.
8. The landlord issued its final response on 23 December 2022. It said:
   1. It had made an administrative error when inputting the lease duration which had resulted in an extra ‘9’ being added to the lease duration. It explained it had sent relevant documents to the resident for them to check before it advertised the property. The resident had confirmed all the information was correct.
   2. It apologised that the resident had experienced difficulties in selling their property.
   3. It had made changes to its processes to allow it to identify errors at an earlier stage and that it now carried out further checks during the sale process.
   4. It would waive its solicitor’s costs when the resident found a buyer on the open market. It also repeated its previous offer to refund the cost of the resident’s previous valuation report.
   5. Once it received an up-to-date valuation report from the resident it would allocate the case to the relevant team as quickly as possible.
   6. It confirmed the property did not meet the criteria in its buy back policy.
9. The resident referred their complaint to this service on 21 March 2023. They asked for the Ombudsman to investigate as they were dissatisfied that:
   1. The landlord had said the incorrect information was due to typing error. They said they had evidence that the landlord had gotten the incorrect information as it had been using the wrong lease.
   2. The landlord had not considered their request for it to buy back their property as an exceptional circumstance.

Assessment and findings

10. All parties accept that, when the property was advertised for sale, incorrect information about the property’s lease duration was included on the advert. This stated that the property had a 999-year, rather than 99-year, lease duration.
11. The resident has provided emails that the landlord had sent in September 2022. These indicate the property had been transferred to the landlord as part of a stock transfer and that limited paperwork had been received from the previous landlord. The landlord had therefore, as part of the sales process, ordered a copy of the property lease from the Land Registry to obtain the relevant details. This was a reasonable action for the landlord to take.
12. The emails further indicate that the landlord had incorrectly obtained a copy of the head lease for the property, rather than the resident’s lease on the property. This was the cause of the error in the information about the lease duration.
13. The Ombudsman has noted the resident’s concern about the landlord’s stage 2 response saying there had been a typing error, rather than that it had taken the information from the wrong lease. While it would have been preferable for the landlord to have provided a consistent account about how the error occurred, the Ombudsman does not consider it would be proportionate to investigate which explanation is correct. This is because the substantive issue (the outcome and impact of the error) would be the same in either case.
14. The landlord has provided a copy of the ‘Confirmation of sale’ documents sent to the resident on 17 September 2021. This included a copy of the proposed advert which showed a lease duration of 999 years. Also included was a declaration form for the resident to sign to confirm the attached sale particulars were correct. This was an appropriate action for the landlord to have taken and was in line with its policy on selling shared ownership homes.
15. The resident has confirmed they signed and returned the declaration. They have also confirmed they were aware their lease only had a 99-year duration. They have stated that, when signing the declaration, they believed the landlord must have extended their lease. They said that the landlord was advertising other properties on its website with 999-year leases and they believed landlords had generally accepted the practice of increasing leases to 999 years.
16. While the Ombudsman does not doubt the resident’s statements, it cannot be ignored that there was a responsibility on the resident (as well as the landlord) to ensure the information used for the sale of the property was correct. The resident had an opportunity at an early stage in the process to query and correct the information about the lease duration but did not do so.
17. In the Ombudsman’s opinion, the landlord was responsible for the initial error in the information and for putting the incorrect duration on the proposed advert. The landlord’s complaint responses indicate it accepted this was the case and it had put in place additional checks to minimise the risk of future errors. This was a reasonable step for it to take.
18. However, the Ombudsman does not consider that this failing, by itself, caused any detriment to the resident. At this stage the error appears to have been limited to the proposed sales advert and had not had any impact on the resident. The alleged detriment was only caused after the resident had confirmed the information was correct and the landlord proceeded with the sales process.
19. The landlord’s actions, following the resident’s confirmation that the sales particulars were correct, were reasonable. There is no evidence the landlord was aware of the error until a buyer had withdrawn their offer. When it became aware of the error it took reasonable steps to further check the information it had and obtain a copy of the correct lease.
20. The landlord’s offer to refund the resident’s valuation report costs and waive its solicitor’s fees was a reasonable one. There is no evidence it was obliged to make this offer under any of its policies.
21. It is for the landlord to decide whether to buy back a property under its voluntary buy back policy. This includes deciding whether any particular case includes exceptional circumstances. The Ombudsman is satisfied that the landlord considered the resident’s request and reached a decision that it was entitled to make. The landlord’s decision was therefore appropriate.
22. While we empathise with the resident’s situation, there is no basis on which the Ombudsman could reasonably conclude that, if not for the error in advertised lease duration, then the property would have been sold, either through the landlord after a lease extension or on the open market. The financial impact described by the resident appears to be the normal costs of living in a property (rent/service charges, insurance, utilities) as well as costs related to selling a property. The Ombudsman cannot speculate on whether these would have been different if the error had not occurred.
23. For the reasons set out above, the Ombudsman considers there was no maladministration by the landlord.

Determination

24. In accordance with paragraph 52 of the Scheme, there was no maladministration by the landlord in relation to providing incorrect information about the length of the lease of the resident’s property.