Aster Group Limited (202307808)

REPORT

COMPLAINT 202307808

Aster Group Limited

11 October 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’s handling of the resident’s request for compensation for improvements he made to the property.

Background

2. The resident was a joint assured tenant of the landlord from 12 March 1998 until 20 March 2022. He has advised us that he was a tenant there for a total of 36 years as he was tenant of the local authority who owned the property previously. The property is a three-bedroom house.
3. On 1 March 2022 the resident gave notice to leave the property. This was because he was moving to another property owned by the landlord that was more suitable for his mobility needs. The landlord decided to sell the property.
4. On 29 April 2022 the resident emailed the landlord to ask it how to claim compensation for the improvements he had made to the property. The landlord responded on 4 May 2022. It asked him for a list of the improvements he had made and copies of the written permission given for the works. The resident replied on the same day and told it that he had:
   1. Installed off road secure parking.
   2. Taken out a dividing wall between the kitchen and dining room to make a large, combined kitchen diner (this involved using the services of a structural engineer).
   3. Installed internal pipework for the central heating system (which he said that the landlord used later when the system was upgraded).
   4. Installed a large patio.
   5. Installed a new staircase and bespoke storage units underneath.
5. The resident said that qualified tradespeople had carried out all the work. He added that he had been given verbal permission for the works apart from the installation of the patio and staircase. However, he did not provide any written proof of this. He said that as the landlord was selling the property and it would be worth more due to the improvements, it was fair that it should compensate him.
6. The landlord responded on 17 May 2022. It said that its home improvement policy stated that compensation was only payable for improvements that it was required to do and that he must have been granted permission for the works to be eligible for payment. It advised that obtaining written permission was also a tenancy agreement condition. It added that it knew the resident felt unfairly treated but its policies and procedures were in place to ensure fairness and consistency.
7. On 19 June 2022 the resident asked to appeal this decision on the grounds that the procedure was based on the landlord re-letting the property not selling it. The landlord called the resident on 20 June 2022 and responded to his appeal on 19 July 2022. It said that it understood that he felt that the alterations added value but that he had made the improvements to enhance his quality of life while living in the property. It advised that it had made the decision to sell the property based on several factors which did not include the improvements made to it and it would use any money made from the sale to build more affordable homes for people in need.
8. The resident complained via email on 13 April 2023. He said that he was unhappy that the landlord had sold the property for £30-40,000 more than it would have done if he had not made the improvements. He added that he was not asking for the total amount that his improvements had made but would like the landlord to pay him “a gesture of goodwill”.
9. The landlord responded on 5 May 2023. It outlined the resident’s concerns and said that he had advised it in a phone call that he thought it should have told him it was selling the property before he left because he would have been likely to remove some of the improvements before leaving. He had also told it that its policies were out of date as they related to a time when it did not sell properties.
10. The landlord said that it could find no evidence that permission had been given for the alterations he had made and that it only paid compensation for improvements that it was required to do itself. It confirmed that it would use any money raised from the sale of the property for the repair of existing properties and development of new affordable homes. It said that it had assessed the property when he ended his tenancy to see if it wanted to sell it and therefore it could not have told him prior to this. It advised that it reviewed all its policies regularly and the home improvements procedure had been reviewed in November 2020 when the void disposal programme was in place. It apologised that he felt that managers had not listened to him or acknowledged that he had left the property in good condition and said that it appreciated all customers who adhered to their tenancy agreements.
11. The resident asked to escalate the complaint to stage 2 of the complaints process on 11 May 2023. He was unhappy that the landlord had not acknowledged that it had received a higher price for the property because of the improvements he had made.
12. The landlord provided a stage 2 complaint response on 2 June 2023. It explained the methodology it followed during the implementation and review of all its policies. This included the completion of equality impact assessments. It apologised that the use of the home improvement and alterations policy had left the resident feeling unfairly treated but as it had “robust processes to ensure that those documents and processes are as fair as could be reasonably expected,” it was unable to uphold this element of his complaint.
13. It confirmed that it decided to sell his old home because it was built using pre-cast reinforced concrete and was therefore of non-traditional construction. It also had an oil heating system which was not considered to be a sustainable heating source. It pointed out that alterations made by residents may make it more likely to choose to sell a property. This was because of the cost of reverting the property so that it could maintain it effectively. It was satisfied therefore that it had not sold the property because it was more valuable.

Assessment and findings

14. The resident’s tenancy agreement stated that he could make improvements if he first obtained permission from the landlord in writing.
15. The landlord’s home improvement/alteration procedure states that it will not unreasonably refuse permission as per the terms of the tenancy agreement. However, it states that “the procedure must be followed to give a standardised and reasonable response regardless of which team or region is implementing it”.
16. It also states that it will “refuse the removal of all walls and will refuse alterations to a structural or load bearing wall… In certain circumstances you have the right to compensation for some improvements as long as you keep to our procedure when you carry out an improvement. A claim for compensation can only be made once a tenancy has terminated and must be received within 14 days of the tenancy end date in writing for the claim to be considered. Compensation is only payable on improvements which we are required to do ourselves and the customer must have formally requested and been granted permission in line with this procedure”.
17. Therefore, the landlord was reasonable in requesting evidence that the resident had obtained permission for all the improvements as this was a condition of the tenancy agreement and the alteration procedure. The resident completed some of the work prior to the landlord taking ownership of the property and he said that staff employed by the local authority had given verbal permission for some work. However, there was no evidence of this. The landlord also checked its own records which was a reasonable action to take, but it could not find evidence that permission had been granted.
18. The landlord responded to the resident’s request for compensation within a reasonable timeframe. It gave valid reasons for its decision. These reasons were in accordance with its procedure and tenancy agreement. It then conducted a review of this decision upon his request.
19. The landlord could have used its discretion to offer the resident a gesture of goodwill for the improvements he made to the property but it was not obliged to do so. Nor was it obliged to quantify how much the improvements had affected the sale price of the property. It acted reasonably by considering the wider implications of paying compensation to the resident. Specifically, it assessed the implications of not adhering to its procedure and that the proceeds of the sale would enable it to improve existing properties or provide new affordable housing.
20. The landlord also considered the residents concerns about the updating of its policies and gave him a full and reasonable explanation of how it ensured that these were fair and up to date.
21. The Ombudsman understands that the resident felt invested in the property, due to the number of years that it was his home and the time and money he put in to improve its condition. However, we have seen no evidence that the landlord either misinformed him or failed to provide appropriate advice about the process. It acted in accordance with its procedures and the tenancy agreement. Therefore, there has been no maladministration in the landlord’s handling of the resident’s request for compensation for improvements he made to the property.

Determination

22. In accordance with paragraph 52 of the Housing Ombudsman Scheme, there was no maladministration in the landlord’s handling of the resident’s request for compensation for improvements he made to the property.