A2Dominion Housing Group Limited (201904541)

REPORT

COMPLAINT 201904541

A2Dominion Housing Group Limited

22 June 2022

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:
1. Response to the resident’s reports of difficulties experienced in staircasing and buying additional shares in the property.
2. Response to the resident’s mortgage lender’s request for additional paperwork.
3. Complaints handling.

Background and summary of events

The resident is a shared ownership leaseholder of the property which is a two-bedroom fifth floor flat in a building. The landlord manages the building and is in turn the head leaseholder of the building which is owned by the freeholder who is the building’s developer (the freeholder). The building is over 18 meters tall.
The landlord’s complaints procedure 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. Expressions of dissatisfaction will not be treated, in the first instance, as complaints and therefore will not be processed through the complaints procedure. However, when a resident indicates that they want to raise a complaint or has to request a service more than once, or the landlord fails to provide a service to a specified standard, this could become a Stage 1 complaint. Service requests are not complaints. A service request can be a request for information
The landlord has a two stage complaints procedure. If residents are unhappy with the stage one response, they are encouraged to let the landlord know ‘as soon as possible’. The complaint should then be escalated automatically to stage two. This is to ensure that complaints are dealt with in a timely manner and are not left unresolved. Neither the landlord’s complaints procedure nor policy sets out timescales for the landlord to respond to complaints.
Paragraph 1.4 of the Housing Ombudsman’s Complaints Handling Code says that landlords should recognise the difference between a service request and a complaint. A service request is a request from a resident to their landlord requiring action to be taken to put something right. A complaint should be raised when the resident raises dissatisfaction with the response to their service request.
Paragraph 3.11 of the Housing Ombudsman’s Complaint Handling Code says that a landlord’s complaints procedure shall include the following maximum timescales for response: logging and acknowledgement of complaint – five working days. Stage one decision – 10 working days from receipt of complaint. Stage two response – 20 working days from request to escalate – if this is not possible an explanation and a date when the stage two response will be received. This should not exceed a further 10 working days without good reason.
The landlord’s compensation policy says that it can make payments for time and trouble where there has been service failure. If the impact of the service failure is low, lasting between one to three months the payments are: £35, £55 and £80.
The landlord’s website has information about staircasing in tall buildings and says that where the landlord is not the freeholder of the building, it will work with those responsible to get fire safety compliance certification. In cases such as this it has no legal right to carry out inspections or works, but it will do everything it can to help.
Advice Note 14 was issued by the Government in December 2018 as part of its Building Safety Programme. In summary the advice was for owners of high-rise leaseholder buildings where the external wall system of the building did not incorporate Aluminium Composite Material (ACM). The advice set out checks which owners could carry out to satisfy themselves, and their leaseholders, that their building was safe.
The Government’s guidance was consolidated in ‘Building Safety Advice for Building Owners’, issued in January 2020. Paragraph 1.4 of this guidance states “for the avoidance of doubt, building owners should follow the steps in this advice as soon as possible to ensure the safety of residents and not await further advice or information to act”. Paragraph 1.5 of the guidance notes that “the need to assess and manage the risk of external fire spread applies to buildings of any height”.
In response to the guidance some lenders took the view that, if certification could not be provided to demonstrate compliance with the Government’s guidance on fire safety, they would be unwilling to offer a mortgage on properties within these buildings as they would have a value of £0.
In January 2020 the Royal Institution of Chartered Surveyors (RICS), The Building Societies Association (BSA), and UK Finance agreed a new industry-wide valuation process to help people buy and sell homes and re-mortgage in buildings above 18 meters (six storeys). Form EWS1 was introduced to prove to lenders that external cladding had been assessed by an expert.
On 14 June 2018 the landlord conducted an intrusive survey of the external cladding of the building. The inspection report said that various areas of the building presented a high risk and considerable resources might have to be allocated to reduce the risk.
On 18 July 2018 the landlord completed a fire risk assessment of the external cladding on the building. The assessment report recommended that “Further intrusive works should be undertaken to establish the extent of the non-conformances, and a remedial program put in place to address the deficiencies, such that the building meets the requirements of the Building Regulations.”
In March 2019 the resident informed the landlord that she wanted to buy additional shares in the property (“to staircase”). The resident says that the landlord supplied her with the relevant paper work to complete and informed her that she would need to get a survey done on the property. The resident went ahead and paid £220 for the survey to be carried out. The survey was valid for three months.
The resident says that in April 2019 her mortgage company’s solicitors, and her solicitors, asked the landlord to provide it with the latest fire report covering the regulations from 2018 and the remedial works report and that she, and both solicitors, continued to chase the landlord.
On 10 July 2019 the resident sent an email to the landlord saying that she was making a formal complaint about:
1. The landlord not telling her when she informed it in March 2019 that she wished to staircase that it was in the process of doing an up to date Intrusive Survey and Remediation to Facades Report which took into account the new regulations that changed at the end of 2018.
2. That since April 2019 she, her solicitors and her mortgage company’s solicitors, had been chasing the landlord for a copy of the up to date fire report.
3. That on 2 July 2019 she had received a letter dated 20 June 2019 from the landlord with an insert from the fire report and saying that all residents who wished to receive a copy of the Intrusive Survey or Remediation to Facades Report, should let the landlord know. However, she had still not received a copy of the report.
4. That due to the landlord’s lack of information the survey she had paid £220 for had expired and she was now on a tracker mortgage instead of the fixed term rate as the mortgage company wouldn’t let her sign up to a new fixed term rate until they saw the fire report.
5. She wanted the landlord to supply the mortgage company with a copy of the fire report and pay for an up to date survey.
On 17 July 2019 the landlord sent the resident an email saying that it had now provided her with a copy of the report her mortgage lender was requesting, along with a covering letter detailing further future actions regarding fire safety at the building. The landlord also confirmed that it could extend the valuation so there was no requirement for any extra expenditure.
On 23 September 2019 the landlord wrote to the resident saying that it had identified her complaint as a service request and had passed it directly to its residential services team. The landlord sent a further email to the resident on 27 September 2019 saying that:
1. It appreciated her frustration but unfortunately it could not offer a timeline of when any works would be carried out as these were to be carried out by a third party. It was currently discussing the matter with the freeholder to confirm when the works would commence.
2. It understood that this information might be disappointing given she was seeking to staircase, and it apologised that it couldn’t provide immediate clarification.
3. It was actively working towards providing all of its residents up to date information regarding fire safety and any required future works in relation to recent legislative changes.
4. It declined to reimburse her for any costs associated with her staircasing application as there were other residents in similar circumstances who had been granted mortgages to staircase. It understood the resident’s frustration, but it was unable to predict the decisions of individual lenders on a case by case basis.
5. It was actively working with the Ministry of Housing, Communities and Local Government and the Council of Mortgage Lenders to address concerns and was awaiting their guidance.
Sometime during October 2019, the landlord sent a further email to the resident saying that, whilst it appreciated the resident’s frustration, unfortunately it could not offer a timeline of works as these were to be carried out by the freeholder, whom it understood would be in the planning stages until December 2019.
On 1 July 2020 and again on 4 August 2020, following contact from the resident, this Service wrote to the landlord asking it to provide an update to the resident on her complaint.
On 24 July 2020 the landlord sent an internal email saying that the situation hadn’t moved forward since its email to the resident on 27 September 2019 (i.e., it was still in talks with the freeholder, but an agreement had yet to be reached.) The landlord said that it believed that the agreement was close, but it couldn’t yet be shared with residents. The email also said that although there was now an EWS1 form for the building which confirmed that there were issues with the cladding, the landlord had decided not to share it with residents due to concerns about its relationship with the freeholder.
Following a telephone call from the landlord the resident sent the landlord an email on 18 August 2020 saying that she was concerned that the landlord had not understood her complaint and that it was saying that the complaint was only at stage 1. She explained that she had made the complaint in 2019.
On 20 August 2020 the landlord replied to the resident by email saying that it was very close to finalising talks with the freeholder, and it expected to receive an update within the next two weeks and would forward on the information to her.
The resident replied to the landlord on 20 August 2020 saying that the issue had been going on since March 2019, and the landlord had known that the building had combustible materials back in the summer of 2018 as a survey was done then (which the landlord had only forwarded to her in July 2019). The resident said that the landlord had also known that building regulations changed in November 2018. Despite knowing this the landlord still encouraged her to proceed with staircasing in March 2019 and she had spent money on a survey, solicitor fees and a mortgage product.
On 9 September 2020 the landlord sent the resident an email saying that as the leaseholder of the building it had been in discussion with the owner of the building, to make arrangements for repair. This had taken some time, but discussions were at an advanced stage, and it anticipated that repair work would begin in the autumn.
On 14 September 2020 the landlord sent the resident an email saying that the discussions with the freeholder were on going and during this time there was little it could do to investigate the complaint. It was therefore going to put the complaint into a pending state. It would look at the complaint again when the issues were resolved
The resident replied to the landlord by email on 14 September 2020 clarifying her complaint that the landlord knew there was an issue with the cladding and the change of building regulations and therefore would have known that her bank would have refused to lend to her. She asked the landlord to read her complaint and not to put the complaint on pending.
On 16 September 2020 the landlord sent the resident an email apologising that it hadn’t grasped the full scope of the complaint and saying that the complaint would be dealt with.
On 18 September 2020 the landlord sent the resident its stage one response to her complaint. In its complaint response the landlord said that:
1. It understood that her complaint was that she had experienced difficulties in staircasing and concerning the landlord’s response to her mortgage provider’s request for a fire report and additional paperwork.
2. Its website explained the potential issues relating to tall buildings.
3. It would not know how each individual lender/surveyor would decide on what is or is not suitable security for a loan.
4. It would be in breach of the lease if it refused a shared owner the right to staircase and it had provided a notice advising of the potential problems. Therefore, it felt that it had discharged its obligations and that she had been made aware of the risks.
5. She had raised a complaint about fire safety on 12 July 2019 and the complaint concerned her request for the latest fire report covering the regulations from 2018 and the remedial works report to provide to her lender in September 2019. The landlord had advised her that its leasehold team were dealing with the issue and that that they would provide her with updates during the time it took for this situation to be resolved. The landlord had advised her that the complaint would be closed at that time.
6. It was still not in a position to provide an EWS1 form for the building. It was in discussions with the freeholder and residents would receive regular updates from its Building Project Team. This was part of the landlord’s three year programme to deal with cladding concerns on its tall buildings and it was therefore not able to conclude part of the complaint but would keep the complaint “in a pending state” and would resolve it fully once the works have been completed and the certificates are available.
7. It apologised that it wasn’t able to respond to her sooner and it offered her £25 compensation for service failure.
The resident asked the landlord to escalate her complaint to stage two of the landlord’s complaints process on 22 September 2020. On 5 October 2020 the landlord sent the resident an email saying it would provide her with its stage two response by 6 November 2020.
On 12 November 2020 a company acting as the landlord’s resident liaison service wrote to all residents in the block providing details about the remedial works that would be carried out and saying that scaffolding would be erected between 16 November 2020 and 7 January 2020.
On 13 January 2021 the landlord sent an update to all residents in the building saying that:
1. The remedial works required to the building had been commenced/been completed.
2. The freeholder had agreed to pay 66% towards the cost of the remedial works. The landlord hoped to fund the remaining 34% from the Government’s Building Safety Fund. Should that application be unsuccessful, it might have to pass the costs on to leaseholders and shared owners.
The resident sent emails to the landlord chasing its stage two complaint response on 7 January 2021, 19 January 2021 and 8 February 2021.
Following contact from the resident this Service sent emails to the landlord asking it to escalate the complaint on 19 February 2021 and 6 April 2021.
On 22 April 2021 the landlord sent all residents in the building an update on the works.
It appears that the landlord then spoke to the resident about her complaint and on 5 May 2021 the landlord sent the resident its stage two complaint response. In its stage two complaint response the landlord said that:
1. The resident had complained that:
  1. She was not informed of potential fire safety issues when she began her staircasing application even though the landlord had been aware of the issues which led to her incurring costs on a mortgage product, survey and solicitor fees.
  2. The landlord had not been transparent and had withheld the intrusive survey from her.
  3. She was not happy with the outcome of her complaint at stage one and was seeking reimbursement of the mortgage, survey and solicitor fees.
  4. She required a copy of the EWS1 form for the building.
  5. That contrary to what the landlord had said in its stage one response she had not been advised that its leasehold team were dealing with the issue and that that they would provide her with updates during the time it took for this situation to be resolved, nor was she advised how to further the complaint and that her complaint was closed.
2. It had been working hard to identify problem buildings and work with the freeholder to find ways of remedying any issues found in a timely manner, and in a way which as much as possible, limited those remedial costs being passed on to residents.
3. As all landlords were in a similar position, it was at the mercy of available experts to carry out this work. Also, it was not always appropriate to share information as soon as it came to light, as doing so could prejudice a landlord’s negotiating position in respect of any remedial works.
4. It did not appear that the fact of potential issues at the building had been made known to its staircasing team whilst the matter was still under investigation by its buildings safety team. Therefore, it did not uphold the complaint that it had not been transparent, and that information was withheld from the resident.
5. The resident had asked when the information on the landlord’s website about the issues with tall buildings had been published. However, it had only been able to establish it was on the web site some time prior to 2 April 2020.
6. Not all lenders were dealing with EWS1 matters in the same way, and it did not determine individual bank or building society lending policies. This meant that some lenders were more amenable than others to lend on buildings where there were notified fire remedial issues. It would be “remiss of [the landlord] to suggest that staircasing is not pursued, when funding is entirely dependent on the lending criteria of banks and building societies or an individual customer’s means.” In addition, as already mentioned, its staircasing team had not been aware that there were potential issues whilst the matter was still under investigation.
7. It noted that the resident had asked for a copy of form ESW1. It said that the works to the building had commenced in November 2020 and were scheduled to complete in October 2021 at which point an EWS1 would be provided. The contractors appointed to carry out this work were updating the residents as work progressed.
8. It had spoken to its complaints team who advised that based on the content of the resident’s communication in July 2019, it was reclassified as a “service request” i.e a matter to be actioned by one of its teams, rather than a formal complaint. Therefore, the resident’s request was passed to the relevant team to respond to. The landlord was satisfied that this course of action was appropriate, and that the resident was informed of this at the time.
9. The resident had asked to escalate her complaint by email on 22 September 2020 and it apologised for the delay in dealing with the complaint at stage two. It had addressed this with the team and would be learning lessons, recognising that the length of time to provide a response has been too long considering the circumstances. It noted that there had been communication failures from the time the resident registered her complaint and delays in responding. It offered the resident compensation of £75 in recognition of her time and trouble in pursuing the complaint.
The landlord’s stage two complaint response dated 5 May 2021 was its final response to the complaint, confirming that the resident’s complaint had exhausted its internal complaints process.

Assessment and findings

In reaching a decision about the resident’s complaint 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 landlord’s response to the resident’s reports of difficulties experienced in staircasing and buying additional shares in the property

The Ombudsman appreciates that the resident’s current situation is difficult and that she is in this position through no fault of their own. This is because until the freeholder is able to provide certification, in line with the Government’s guidance, the resident is effectively in limbo as she is unable to staircase as lenders will not lend on the building because of the potential fire safety issue.
As the landlord is not the freeholder of the building it is unable to obtain certification pursuant to Advice Note 14 itself, the freeholder must do this. While the landlord cannot obtain form EWS1 itself, the Ombudsman does consider that the landlord has a responsibility in respect of the guidance. This is because the Ombudsman would expect to see pro-active engagement by the landlord with the freeholder regarding its response to the guidance, for its own benefit as a leaseholder, and for its own leaseholders.
The Ombudsman has not seen evidence of the landlord’s discussions with the freeholder in respect of the freeholder’s response to Advice Note 14, including compliance with the guidance. However, it is noted that the landlord referred to these discussions on the following occasions:
1. On 27 September 2019 it informed the resident that it was in touch with the freeholder with a view to confirm when the works would commence.
2. In October 2019 it informed the resident that it understood that the freeholder was still in the planning stages with the required works, but it was in touch with the freeholder “with a view to confirm when these works will commence”.
3. In an internal email dated 24 July 2020 it said it was still in talks with the freeholder and an agreement about the works was close.
4. On 20 August 2020 it informed the resident that it was very close to finalising talks with the freeholder, and it expected to receive an update within the next two weeks.
5. On 9 September 2020 it informed the resident that discussions with the freeholder were at an advanced stage, and it anticipated that repair work would begin in the autumn.
6. On 12 November 2020 the landlord’s resident liaison service wrote to all residents in the block to update them about the remedial works and provide details about the dates for the erection of scaffolding.
7. On 13 January 2021 it informed all residents in the building that the freeholder had agreed to pay 66% towards the cost of the remedial works.
However, this Service has not seen evidence concerning any contact between the landlord and the freeholder prior to the resident’s complaint in July 2019, despite it being widely known by the summer of 2019 that Advice Note 14 compliance was causing issues with mortgage valuations.
Although responsibility for compliance with Advice Note 14 resides with the freeholder, the landlord owns the relationship with the resident and had an obligation to all the residents to ensure it was aware of what the compliance situation was. This was in order to keep itself sufficiently informed so that it could, in turn, keep residents informed. There is no evidence that the landlord started sending communication to other residents about this issue until November 2020, and any information that it provided to the resident prior to this was in response to her enquiries.
The landlord said in its stage one complaint response that its website explained the potential issues relating to tall buildings. However, there is no evidence that this information was on its website at the time the resident applied to staircase in 2019. Therefore, despite the landlord being aware of the fire safety issues at the building from June 2018, there is no evidence that it alerted the resident to the potential issues surrounding mortgage valuations when she applied to staircase.
The landlord’s lack of engagement with the freeholder prior to July 2019, its lack of proactive communication to the residents in the building until November 2020 and its failure to alert the resident to potential issues surrounding mortgage valuations represent maladministration by the landlord.

The landlord’s response to the resident’s mortgage lender’s request for additional paperwork

There was maladministration by the landlord in respect of this aspect of the complaint as:
1. The landlord had obtained the fire reports in June and July 2018 but did not respond to the resident’s or the mortgage lenders requests for copies from April 2019 onwards until 17 July 2019.
2. The landlord was aware from June 2018 that there were fire safety issues at the building, and it was therefore not reasonable for it to say in its complaint response that it hadn’t responded to the requests for the fire reports as the potential issues at the building had not been made known to its staircasing team.

The landlord’s complaints handling

There was maladministration by the landlord in its handling of the resident’s complaint as:
1. The resident informed the landlord on 10 July 2019 that she wanted to make a complaint and set out her dissatisfaction about the lack of information the landlord had given her about the fire safety concerns and the landlord not responding to the mortgage lender’s and her requests for information.
2. However, the landlord did not deal with this as a complaint, but as a service request. This is despite the complaint falling within the definition of a complaint set out in the landlord’s complaints procedure that a complaint is ““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…”.
3. The provisions of the landlord’s complaints procedure that “expressions of dissatisfaction will not be treated, in the first instance, as complaints and therefore will not be processed through the complaints procedure” is not compliant with paragraph 1.4 of the Ombudsman’s Complaint Handling Code.
4. The landlord not treating the resident’s email dated 10 July 2019 as a formal complaint caused the resident to incur time and trouble in contacting this Service.
5. Despite this Service asking the landlord to deal with the resident’s complaint on 1 July 2020 and 4 August 2020, the landlord did not send the resident a stage one complaint response until 18 September 2020. This was 56 working days after this Service first asked the landlord to deal with the complaint and 46 working days outside the 10 working day timescale set out in the Housing Ombudsman’s Complaint Handling Code.
6. The resident asked to escalate her complaint to stage two of the landlord’s complaint procedure on 22 September 2020. The landlord did not issue its stage two complaint response until 5 May 2021, some 158 working days later and 138 working outside the 20 working day timescale set out in the Housing Ombudsman’s Complaint Handling Code.
7. The resident first asked the landlord to log her complaint on 10 July 2019. However, the landlord’s failure to treat her contact as a complaint and its delays in issuing its stage one response and in escalating the complaint to stage two meant that the complaint took 22 months to exhaust the landlord’s internal complaints process.
8. The landlord offered £75 compensation. Under the landlord’s compensation policy, the sum of £75 compensation is for instances where the service failure impact is low, lasting between one to three months. As set out above the delays in dealing with the complaint were significantly longer than three months. The £75 compensation offered by the landlord is not proportionate for the time and trouble and distress and inconvenience incurred by the resident as a result of the landlord’s complaint handling failures set out in this paragraph.

Determination (decision)

In accordance with paragraph 54 of the Housing Ombudsman Scheme there was maladministration by the landlord in respect of the complaints about the landlord’s:
1. Response to the resident’s reports of difficulties experienced in staircasing and buying additional shares in the property.
2. Response to the resident’s mortgage lender’s request for additional paperwork.
3. Complaints handling.

Reasons

There is no evidence that the landlord was in contact with the freeholder about its response to Advice Note 14 prior to the resident’s complaint. There is no evidence that the landlord was regularly updating residents about the freeholder’s compliance with Advice Note 14 prior to November 2020, or that it alerted the resident to potential issue with mortgage valuations.
The landlord unreasonably delayed responding to the resident’s and the mortgage lender’s requests for copies of the fire reports.
The landlord did not treat the resident’s 10 July 2019 email as a formal complaint. There were delays in responding to the resident’s complaint at both stages and the compensation offered by the landlord was not proportionate to the time and trouble and distress and inconvenience incurred by the resident.

Orders

The landlord is ordered within four weeks of the date of this report to pay the resident compensation totalling £450. This is comprised of:
1. £100 for the distress and inconvenient incurred by the resident as a result of the landlord’s response to the resident’s reports of difficulties experienced in staircasing and buying additional shares in the property.
2. £100 for the distress and inconvenience incurred by the resident as a result of the landlord’s response to the resident’s mortgage lender’s request for additional paperwork.
3. £250 for the time and trouble incurred by the resident as a result of the landlord’s failures in complaint handling.
If the remedial works on the building have not yet been completed, within four weeks of the date of this report the landlord is to write to all the residents in the building:
1. Providing an update on the works being undertaken to remedy the deficiencies identified in the building.
2. Providing a timetable for when it expects the various remedial work to be completed.
3. Setting out a clear timetable detailing how and when the landlord will communicate with residents going forward about the progress of the remedial works, with updates being provided at least every three months.
Within four weeks of the date of this report the landlord should review its complaints procedure to ensure that it complies with paragraphs 1.4 and 3.11 of the Housing Ombudsman’s Complaint Handling Code.
The landlord should confirm compliance with these orders to this Service within four weeks of the date of this report.