A2Dominion Housing Group Limited (201905765)

REPORT

COMPLAINT 201905765

A2Dominion Housing Group Limited

23 April 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

This complaint is about the level of compensation awarded by the landlord to the resident for the incorrect information it provided before he purchased his property.

Background and summary of events

Background

The resident is a leaseholder. He states that he bought his leasehold on 26 July 2018. The property is a flat within a block of 29 flats.
The lease agreement obliges the resident to pay the service charge and ‘interim service charge’ and that these will make provision for ‘the cost of maintaining and repairing and making provision for the replacement of the lifts’.

It also states that:

‘Any notice under this lease shall be… sufficiently served if left addressed to the Tenant on the demised premises’.

The landlord’s website contains information about its role when a resident sells their property:

‘Your buyer’s solicitor will raise any queries with your solicitor about your home. The number of queries raised can vary from solicitor to solicitor, which will affect the length of time the sale takes to complete. We will instruct our solicitors to provide a guidance pack to your solicitor on the sale of your home, and they will also arrange for the necessary paperwork to be prepared, which will allow your sale to complete.’

Section 20 of the Landlord & Tenant Act 1985 requires landlords to consult with leaseholders before carrying out qualifying works. These are repairs or improvement works that would cost a leaseholder more than £250.
The landlord’s complaints procedure outlines a two–stage complaints process. A stage one response is required within 10 working days of receipt of the complaint and a stage two response is required within 20 working days of the escalation. It adds that it will not consider matters that are already subject to legal action and that a service charge dispute is ‘either resolved in-house or goes direct to the First Tier Tribunal (Property Chamber)’.
The landlord’s compensation policy states that the landlord can make discretionary payments where an appropriate level of service has not been delivered.
This complaint relates to lift replacement works conducted by the landlord at the resident’s block from September 2018 and the information that was made available to the resident when he was in process of purchasing the property prior to those works.

Summary of Events

A consultant wrote to the landlord on 15 January 2018 – he assessed quotes received from four companies as part of a tendering process for lift replacement works with a recommendation made for the landlord to proceed with one of these companies.
The landlord completed an ‘enquiries questionnaire’ for the property on 17 April 2018 and sent it to the seller’s solicitors on the same day. It stated that any section 20 works for the next two years were completed but unpaid.
A completed major works questionnaire was sent to the seller’s solicitors on 19 April 2018. This stated that external refurbishment was likely within the next five years and that cyclical decorations works would be due in 2021-22.
The seller’s solicitors wrote to the landlord on 8 May 2018. They asked further questions, including a request for any estimates and costings available for removal and replacement of the existing passenger lift.
The landlord replied to the seller’s solicitors on 17 May 2018. On the question of the lift works, it advised that ‘we are going through the process of tender to remove and installation of the new lift. However, we haven’t finalised and awarded the tender, so we don’t know the estimated cost yet.’
The landlord issued letters dated 7 September 2018 to the block. It advised that lift replacement works were due to begin on 14 September 2018 and invited residents to a meeting to discuss these works. It informed residents of the contractor who would be carrying out the works and estimated a cost of £4197.43 for leaseholders.
Minutes of the residents’ meeting on 12 September 2018 show that the landlord advised those present that there had been an internal miscommunication that led to a lack of notice for lift replacement works. There were comments from one individual, presumably from the resident, that he had taken ownership in July 2018 and that his own refurbishment works would be impacted by the loss of lift service. The landlord advised that it had applied to the First Tier Tribunal (Property Chamber) for dispensation for the consultation process not being followed.
The tribunal issued a decision on 12 November 2018 on the landlord’s application to dispense with the requirement to consult lessees (as per section 20 of the Landlord & Tenant Act, 1985). The tribunal found that:
1. the landlord sent notices of intention to leaseholders on 15 November 2017, prepared a specification, received tenders from four contractors and received recommendations from a surveyor on 15 January 2018
2. rather than following the section 20 process, the landlord entered into a contract with one of the contractors with a view to commence works in September 2018 (it was noted that the landlord thought this decision had been made in March 2018)
3. it had received representations from various parties, including the resident who told the tribunal that he had not been advised of the works when he purchased the flat in July 2018 and that the commencement of works at short notice had caused him problems with the refurbishment of his flat
4. it agreed dispensation on the grounds that there was ‘no evidence of prejudice that would require any penalty to be imposed’ on the landlord
5. lessees were still able to challenge costs under section 27a of the Landlord & Tenant Act.
The landlord has provided this Service with an undated copy of the resident’s initial complaint. The complaint referred back to emails the resident stated he had sent on 11 September 2018 and 26 October 2018 when he said he had asked it to amend his correspondence address. He advised that he was aware other residents of the block had received information about the tribunal decision but he had not. He complained that the landlord had failed to provide information about the lift works despite it having ordered the works in April 2018 and him not having purchased the flat until July 2018.
The landlord issued a stage one complaint response on 24 January 2019. It concluded that:
1. the resident’s correspondence address had been corrected in November 2018 and tribunal decision notes had been sent to him
2. an apology was offered for the failure to notify solicitors of potential costs for lift replacement works during the pre-sale process – it advised that this was likely due to a breakdown of communication between different departments
3. it was not convinced of the validity of the resident’s claim for waiving part, or all, of the lift replacement bill given the resident would have been aware of the lift replacement
4. the claim would be outside of the complaints process as it was about the level of a service charge so he would need to approach the tribunal, providing its November 2018 decision did not relate to this
5. compensation of £150 was offered for the service failure in communication.
The resident replied on 24 January 2019 – he asked to escalate the complaint on the grounds that:
1. he had been advised in a telephone conversation with the landlord on 28 November 2018 that his correspondence address had not been amended at that point so he queried what date this had been done (he asked for a copy of the tribunal decision paperwork as he had not received it yet)
2. he had lost out financially by the landlord failing to follow the section 20 procedure and failing to notify him correctly during conveyancing
3. the information he had been provided with during the conveyancing process was that there were no major works to be undertaken
4. he believed he should be awarded £2,000 compensation which he stated was around 50% of the major works costs.
The landlord issued its final complaint response on 14 February 2019. It concluded that:
1. it held the correct correspondence address details for the resident
2. it would provide a copy of the tribunal paperwork
3. it was willing to award £150 compensation for its ‘overall failure’ in communication with the resident but any other failings had been considered as part of the tribunal decision (who had been provided with the resident’s representations)
4. it had agreed to reduce the management fee for the major works in question
5. it apologised for the communication failures and said it taken a number of steps to avoid the same problems occurring in future.
The resident wrote to the landlord on 5 June 2019. He stated that the tribunal paperwork showed the landlord had formally notified a contractor to proceed with the lift works on 18 April 2018 so the landlord’s email of 17 May 2018 was inaccurate. He told the landlord that he therefore did not expect to pay any major works costs given it had not met its legal obligations as part of the conveyancing process.
The landlord wrote to the resident on 13 June 2019. It reiterated that he had exhausted its complaints process and recommended that he contact their legal team as the points raised by the resident were part of the tribunal hearing.
The resident replied the same day. He argued that the tribunal hearing related to the major works but his complaint was different as it was related to conveyancing and he would follow up with the legal team.
The landlord issued a service charge bill to the resident on 12 September 2019 for the actual 2018/19 costs, including £3297.26 for major works, to be paid by 31 March 2020. The notes advise that any works costing more than £250 ‘will be limited to these amounts unless your landlord has properly consulted on the proposed works or agreement or the First-tier Tribunal has agreed that consultation is not required.’

Assessment and findings

In reaching a decision we consider whether the landlord has kept to the law, followed proper procedure and good practice, and acted in a reasonable way. Our duty is to determine complaints by reference to what is, in this Service’s opinion, fair in all the circumstances of the case.
The Ombudsman’s Dispute Resolution Principles are:

Be fair
Put things right
Learn from outcomes

This Service will apply these principles when considering whether any redress is appropriate and proportionate for any maladministration or service failure identified.

It is not disputed that the landlord was in breach of its duty to consult with leaseholders under section 20 of the Landlord & Tenant Act 1985 and that the First Tier Tribunal agreed dispensation to the landlord for this failure. The resident made representations as part of this tribunal process and it is out of this Service’s jurisdiction to make any assessment on this failure to consult. Residents were signposted by the tribunal as to how any service charges related to the works could be challenged.
The landlord’s complaints procedure states that it cannot review matters for which legal proceedings have occurred. It was therefore appropriate for the landlord to advise the resident in its final complaint response that any aspect of his claim related to the failure to consult was outside the complaints process.
It is also not disputed that the landlord failed to provide accurate information during the conveyancing process prior to the resident’s purchase of the property. It has acknowledged this as a communication service failure – it apologised, awarded £150 compensation and stated lessons had been learned. It was appropriate for the landlord to consider a remedy for its failings during the conveyancing process as this had not been part of the tribunal’s decision.
The resident has suggested that he would not have purchased the property had he been aware of the lift replacement works and that he expects to pay no charges for these works given the landlord’s conveyancing process failure. The landlord did advise the seller’s solicitors in May 2018 that lift replacement works were due to occur so the resident should have been aware that a major works bill was pending for the lift replacement and the lease agreement obliges the resident to pay service charges and interim service charges. It was appropriate for the landlord to take this factor into consideration when assessing the resident’s complaint.
The Ombudsman’s Remedies Guidance recommends a range of £250-£700 compensation for an instance of considerable service failure, including in cases of ‘misdirection’ where a landlord has offered incorrect information. A compensation offer within this range would therefore have been appropriate, particularly given the landlord’s errors may have impacted the resident’s understanding of the financial costs involved in his purchase. The landlord’s offer of £150 compensation and its general comments that steps had been taken to avoid the problem occurring in future did not therefore offer sufficient redress given the circumstances of the case.
In summary, the landlord provided inaccurate information to solicitors during the conveyancing process prior to the resident’s purchase of the flat. It was appropriate for the landlord to award compensation for this but the level of compensation was not sufficient for the service failure it identified.

Determination

In accordance with paragraph 54 of the Housing Ombudsman Scheme, there was service failure by the landlord in the level of compensation awarded by it for the incorrect information it provided before the resident purchased his property.

Reasons

The landlord provided inaccurate information to solicitors during the conveyancing process and it has failed to offer sufficient redress.

Orders

The landlord to pay compensation of £250 to the resident in recognition of the impact of its service failure during the conveyancing process; if it has already paid the proposed £150, it should pay an additional £100 to the resident.

The landlord should confirm compliance with this order to this Service within four weeks of the date of this report.

Recommendations

The landlord to write to the resident and this Service within four weeks to confirm the specific measures it has taken to avoid incorrect information about major works being provided during the conveyancing process in future.