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Citizen Housing (202007884)

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REPORT

COMPLAINT 202007884

Citizen Housing

28 May 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

  1. The complaint is about the landlord’s response to the resident’s ‘Voluntary Right To Buy’ (VRTB) application.

 Background and summary of events

Background

  1. The resident has been a leaseholder of the property of the landlord since 30 June 2020, having previously been an assured tenant at the same address since 2 July 2014. The landlord is a registered provider of social housing.
  2. The landlord was a member of the Ministry of Housing, Communities and Local Government’s (MHCLG) ‘Midlands Pilot Scheme’ of VRTB.
  3. The landlord operated a VRTB policy. The policy notes applicants must be able to demonstrate they have lived at the property for the previous 12 months. The policy does not note any timeframes for completion of the purchase.
  4. The landlord operates a two stage complaints policy.
  5. The landlord operates a compensation policy. The policy notes the landlord may offer discretionary compensation where its service has not been in line with its service standards. The policy notes it may offer up to £200 for “inconvenience.”

Summary of events

  1. The resident made an application to purchase his property through VRTB on 1 November 2018. The landlord acknowledged the application on 12 November 2018 and informed him that to progress the application, it required an application fee of £250. It further advised it would set out the next steps in the application process within eight weeks of receipt of the application fee. It is not disputed that the resident subsequently paid the application fee.
  2. On 20 December 2018, the landlord advised it required evidence that the resident had resided at the property for the previous 12 months, and suggested a number of possible documents it would accept as proof, including utility bills, bank statements, etc. On the same date, the resident queried why this was required. On 3 January 2019, the landlord confirmed it was a standard requirement which was noted on the application form. On the same date, the resident noted that most institutions had now gone “paperless,” and he was having difficulty obtaining the required documents. He again queried the necessity for this information and requested a “link to the specific guidance that requires me to do so,” otherwise it would “end up in a grievance situation which … I would take to the ombudsman or similar.”
  3. On 4 January 2019, the landlord requested the resident provide whatever evidence he had managed to obtain for it to assess. The resident provided his documents on the same date. He also advised he would need to obtain a further mortgage assessment “should the process not move forwards soon.”
  4. Following receipt of the resident’s documents, the landlord confirmed on the same date that it had now completed its checks and would now prepare its ‘offer of sale’. It also advised it required evidence of the resident’s purchase funds, and that it would need to carry out a valuation of the property. It did not set out any timeframe for completion of these steps.
  5. On 5 February 2019, the resident advised his preferred surveyor from the landlord’s list of approved surveyors, and on 7 February 2019, the landlord sent its instructions to the surveyor. The surveyor subsequently provided its survey on 26 February 2019.
  6. On 28 February 2019, the resident advised the landlord that his mortgage lender had told him his “agreement in principle will run out soon.” He subsequently requested the landlord inform him “what’s going on please and a timescale?” On 5 March 2019, the landlord advised it was aiming to issue its offer of sale by 18 March 2019.
  7. On 15 March 2019, the resident reminded the landlord he was expecting the offer of sale on 18 March 2019. On the morning of 18 March 2019, the resident advised he would “be submitting a formal complaint” if he did not receive the offer of sale. The landlord confirmed on the same date that it would be issuing the offer of sale by the close of business. It is evident that the offer of sale was sent by post on this date, however, on 19 March 2019, the resident noted he had not received the offer and queried if it was sent by post. The landlord confirmed on the same date that it was, and subsequently provided him with an electronic copy for his records.
  8. On 28 March 2019, the resident accepted the offer of sale and the resident’s lender provided his solicitor with a formal mortgage offer which was valid until 28 September 2019. It is not evident that the landlord was aware of the expiry date of the mortgage offer.
  9. On 5 April 2019, the resident’s solicitor sent a letter of introduction to the landlord and also requested it “forward to us the usual draft papers and a plan to enable searches to be prepared.” It is not evident that the landlord replied and on 6 June 2019, the resident’s solicitors advised him they were yet to receive a response and were continuing to chase the landlord. The landlord has provided this service with a chronology of events, which notes it received the resident’s solicitor’s correspondence on this date. On the same date, the resident contacted the landlord and also requested they provide the necessary paperwork and also “provide an indicative timescale.” The landlord replied on 7 June 2019 and advised that it was intending to instruct its solicitors “next week,” who would in turn get in contact with the resident’s solicitors.
  10. The landlord has provided this service with copies of its communications which indicate it instructed its solicitors regarding the sale on 3 July 2019. On the same date, it advised the resident’s solicitors that “regrettably, we have experienced a backlog of work which has resulted in a delay in processing this,” but that it had instructed its solicitors to attend to it urgently. It also contacted the resident directly with the same information and apologised for the delay.
  11. It is evident that the resident subsequently requested a subject access request of the landlord’s documents, however, this service has not been provided with correspondence relating to this. In a communication to its solicitors on 16 August 2019, the landlord noted the resident had expressed concern at the lack of progress and requested it provide a further update. On the same date, the residents’ solicitors requested the landlord advise them of the expected completion date. It is not evident, however, that the landlord responded. Additionally, on the same date, the resident noted that his solicitors had made repeated requests for documents and that he would be making a “formal complaint with regards to the time taken to process this matter.”
  12. On 3 October 2019, the resident’s solicitor informed him it still had not received the landlord’s documents and was continuing to chase weekly. This service has not been provided with copies of the resident’s solicitor’s communications chasing the documents. On 8 October 2019, the resident contacted the landlord and expressed his dissatisfaction at the continued delay. He further advised it was his intention to pursue compensation and that he did not feel he could approach his mortgage lender for re-approval as he did not “have the confidence that that offer would also not expire.”
  13. On 16 October 2019, the landlord confirmed it had issued the documents on 11 October 2019. This service has not been provided with a copy of this communication. It noted that once the documents had been signed and sealed following any necessary enquiries, it would then be able to arrange a completion date.
  14. On 30 December 2019, the resident reiterated his dissatisfaction with the ongoing delays and advised he had had to pay an additional mortgage valuation fee due to the previous offer expiring. On 7 January 2020, the resident also expressed concern that the discount to the purchase price available as a result of VRTB may not be available if the completion occurred after the ‘Homes England’ deadline of February 2020. This service has not been provided with any documentation relating to Homes England.
  15. On the same date, the landlord replied and apologised for the delays and its “poor communication.” It advised that the delays were due to its “staff shortages,” and that “since instructing our solicitors we have come across some further delays.” It further advised that the ‘engrossments’ were with the resident’s solicitor to be signed. Additionally, it advised that VRTB was a pilot scheme and as such, there had been “lessons for [the landlord] to learn in how VRTB is administered,” but that it was “confident that there has not been any delay that would result in you losing your entitlement to VRTB and discount as part of this.” The landlord has advised this service that on 19 March 2020 it advised the resident that it had spoken with Homes England who had confirmed it would honour the discount. This service has not been provided with a copy of that correspondence.
  16. The landlord has advised its solicitors contacted the resident’s solicitors on 14 May 2020 to propose completion on 21 May 2020 but did not receive a response until 7 June 2020. This service, however, has not been provided with these communications. It is evident that there was an attempt at completion on 16 June 2020, however, the landlord’s internal correspondence provided to this service noted that no funds were received on the expected date of completion. It is not disputed that completion subsequently occurred on 30 June 2020.
  17. On 9 July 2020, the resident made a formal complaint. He reiterated the delays he had experienced since his initial application in November 2018 and that he was dissatisfied with the level of communication from the landlord. He advised it was his understanding that it should only take eight weeks for a landlord to produce the seller’s documents and that as a result of the delays he had had to pay a further £250 for his mortgage offer to be revalued. He also advised that as a result of the delay, he considered himself to have been financially disadvantaged due to having continued to pay rent, and by not having the opportunity to start repaying his mortgage sooner. As a result, he requested a refund of 10 months rent (being £3,400), as well as the £250 mortgage revaluation fee.
  18. The landlord provided its stage one response on 21 July 2020. It reiterated that VRTB had been a pilot scheme and that throughout its implementation “there have been a number of learning points.” It advised that many of the other applicants had experienced the same “frustrations.” It also advised that “VRTB is substantially different from statutory Right to Buy, most notably there are no statutory timescales for completion,” and that it had not profited from the delays. As a result, it concluded that it would not be able to offer any “financial payments … for the time the process has taken.” It also advised it would not refund the resident’s £250 application fee.
  19. The resident replied on 28 July 2020 and expressed his dissatisfaction with the landlord’s response. He noted that he had not been requesting the refund of the application fee, but rather, the fee for his lender to revaluate the property. He was also concerned that the landlord had not addressed why there were delays and that it had not explained in what way VRTB was so different from statutory Right To Buy that it would cause delays. He subsequently requested his complaint be escalated to stage two.
  20. The landlord provided its stage two response on 12 August 2020. It reiterated the events that had taken place, including the initial delay caused by the resident querying the requirement to confirm his residency at the property. It advised that following the acceptance of its offer, it had not expected the number of applications it received, which combined with its team having to learn how to process VRTB sales, “created some challenges and delays.” It reiterated that the VRTB process was “hugely different from the statutory Right to Buy” and that there were “no statutory timescales devised throughout the process.”
  21. Regarding the resident’s request for compensation for his additional £250 mortgage revaluation fee, the landlord apologised for having previously misunderstood this request in its stage one response. It noted that the lender offered the chance to extend the offer within two weeks of the expiry date and so requested the resident provide further information about why he considered the landlord was responsible. It apologised for “any unnecessary delays” it had caused to completion but reiterated that “there are no guidelines regarding the length of time it should take to process and complete applications.” It recognised, however, that it had failed to “respond to some communications within our timescale,” and subsequently concluded by offering £50 compensation.

 

Assessment and findings

  1. Based on the landlord’s VRTB policy, and on the VRTB application form, the landlord does not offer any indication of how long the VRTB process will take to complete. While the Ombudsman accepts that this was a pilot scheme and the landlord was developing its internal process and undertaking staff training throughout this period, the Ombudsman nevertheless considers it best practice for landlords to provide timeframes or updates wherever possible and respond to communications within a reasonable timeframe.
  2. Following the resident’s initial application, the landlord appropriately set out an eight-week timeframe for it to begin the process following receipt of the resident’s application fee. Given that its policy and the application form note that it required evidence that the resident was residing at the property 12 months prior to the application, its request for evidence was reasonable, and following the resident’s issues obtaining the required evidence, the landlord appropriately requested alternative evidence in order to assist him.
  3. Following receipt of these documents, the landlord appropriately set out the next steps of the process, however, it did not give an anticipated timescale. While the Ombudsman accepts that the timescale is somewhat dependent on the resident providing certain information, given that the landlord previously set out a timescale for its action following the receipt of the resident’s application fee, and given that the resident expressed his concern that his mortgage assessment may expire, it would have been helpful had it set out similar timeframes for these steps, even if these were provisional.
  4. Following the resident’s request for a timescale after the survey in February 2019, the landlord appropriately advised the date on when it would provide its offer of sale. While there was confusion about the offer of sale being sent by post, the landlord appropriately provided a digital copy when requested by the resident.
  5. As noted above, while the landlord does not guarantee a timeframe for completion, the Ombudsman would expect them to respond to correspondence from the resident within a reasonable timeframe. Following the resident’s solicitor’s communication on 5 April 2019 requesting the sale documents, it is not evident that the landlord replied until 7 June 2019, in between which the resident also made a request for the landlord’s timescales. While the landlord has explained in its later correspondence that staff shortages meant that the processing times were delayed, this should not have prevented the landlord providing an update to explain as such within the two-month period following the initial request. This delay would have caused the resident distress as well as time and effort in having to chase an update.
  6. While the landlord subsequently advised it would be instructing its solicitors in the week after 7 June 2019, it is evident that it did not instruct its solicitors until 3 July 2019. While it appropriate that it informed the resident’s solicitors at this time that there had been a delay, it is evident that the resident’s solicitors made further requests for updates in August 2019, and that they still had not been provided with the sale documents by 3 October 2019, following which the resident made an additional request for an update. Given that the resident had previously expressed his concern that his mortgage assessment may expire, that he and his solicitor had made multiple requests for updates, and that he had indicated he would raise a formal complaint (which should not have been necessary in order to progress matters), the landlord’s failure to respond over this period of time represents another missed opportunity to keep the resident informed, resulting in his further distress and inconvenience.
  7. Following the resident’s concerns that the VTRB discount period may expire, the landlord appropriately replied and provided an apology and explanation for its delays. It also appropriately advised the next steps to be completed, and that it could arrange a completion date following the completion of these steps. It also appropriately sought clarification regarding the expiry of the discount and subsequently contacted the resident within a reasonable timeframe to reassure him that the discount would not be lost.
  8. It is evident that from May 2020, the landlord’s solicitors were proactive in arranging a completion date, and it is not evident that the landlord was the cause of any further delays prior to the completion on 30 June 2020.
  9. Following the resident’s formal complaint, the landlord appropriately explained the nature of the pilot scheme and that it was not bound to any statutory completion timescales. While the resident had expressed his position that he was financially disadvantaged by the delay, given that the landlord was not bound to complete within a timeframe, its position that it could not offer compensation for this was reasonable. Given, however, that it had previously acknowledged its communication was poor, it would have been appropriate to have offered a further apology in its formal response, along with its position on any compensation for the resident’s time and trouble, which it did not do.
  10. Following the resident’s request for an escalation, the landlord appropriately further clarified the difficulties it had experienced with the VRTB pilot scheme. While the resident had sought a detailed explanation of the differences with VRTB and statutory RTB, the Ombudsman considers that the landlord’s explanation that there were differences which its staff had to learn as they went was reasonable. Its apology that it initially misunderstood the resident’s request for compensation for the additional £250 mortgage revaluation fee was also reasonable. In the Ombudsman’s opinion, given that the landlord had not committed to a completion date and that it cannot be held responsible for the timescales imposed by the resident’s lender, its request for more information from the resident about why it should be responsible was reasonable.
  11. It is evident that the landlord’s failure to respond to the resident’s requests for updates caused him distress and inconvenience, however, while the landlord’s updates would have better informed the resident, it is not evident that the updates would have altered the timeline of the process and so the landlord’s position that it would not pay compensation on this basis was reasonable. It was, however, appropriate that it offered compensation for its service failure regarding its communication. The landlord missed multiple opportunities to provide the resident with an update that the process was being delayed. Additionally, the timespan between the resident’s requests for updates and the landlord’s responses were unreasonable. Given that the resident had expressed his concerns about the expiry of his mortgage assessment, and that the landlord was aware there was likely to be delays given it acknowledged this had happened to multiple other applicants, the landlord’s offered amount of £50 compensation is insufficient in the circumstances. In the Ombudsman’s opinion, an amount of £200 is reasonable, being £50 per month for the delays between the resident’s solicitors request for sale documents in April 2019 and the landlord’s response in June 2019, and also the resident’s further request for an update in August 2019 and the landlord’s response in October 2019.

Determination (decision)

  1. In accordance with paragraph 54 of the Housing Ombudsman Scheme there was service failure by the landlord in respect of the complaints regarding its response to the resident’s VRTB application.

Reasons

  1. While the landlord was not obligated to complete the VRTB process within a specific timeframe, the Ombudsman would expect the landlord to respond to the resident’s correspondence within a reasonable timeframe and provide reasonable updates where possible. It is evident that the landlord was aware that the process was likely to result in delays given its experience with other applicants, however, despite multiple requests for timescales by the resident, it did not manage his expectations accordingly.
  2. Additionally, there were multiple occasions where the landlord went without responding to the resident for two-month periods. While its decision not to award compensation on the basis of the delays to completion were reasonable given it had not committed to any timescales, its repeated delayed communication caused distress and inconvenience to the resident and it is appropriate that an amount of compensation be offered, greater than that offered by the landlord in its stage two response.

Orders and recommendations

Orders

  1. The Ombudsman orders the landlord to pay compensation of £200 for any distress and inconvenience caused to the resident by its delays in communication.
  2. This replaces the landlord’s previous offer of £50. This amount must be paid within four weeks of the date of this determination.

Recommendations

  1. The landlord to contact the resident within four weeks of the date of this determination and reiterate its request for further information about why the resident considers it responsible for the additional mortgage revaluation fee, if it has not already done so.