Midland Heart Limited (202225725)

REPORT

COMPLAINT 202225725

Midland Heart Limited

30 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

The complaint is about the landlord’s handling of:
1. The resident’s property sale.
2. The associated complaint handling.

Background

The resident was a shared ownership leaseholder of the landlord, buying 51% of the property on 26 March 2018. The property is a 2-bedroom house with 2 parking spaces at the front.
The landlord is a housing association and was the freeholder of the property.
The landlord has no vulnerabilities recorded for the resident.
On 26 April 2022 the resident contacted the landlord. She enquired about selling her house. The landlord sent the necessary paperwork, and the resident returned them on 20 May 2022, along with a valuation of the property. The resident found a 100% buyer. The buyers wanted information about the service charges before they committed to the purchase. On 13 June 2022 the landlord told the resident:
1. It could not instruct its solicitors until the resident’s solicitor confirmed the sale.
2. That specific lease information was not included in the admin fee, and they form part of solicitor’s questions, and that there would be a charge for the information.
3. It had initially said it would send the charge information to the resident’s estate agent, but that it did not do this in the end as the buyer was purchasing 100%. This meant the landlord did not need to approve the buyer.
4. It would send the charges information to the estate agent.
The resident made a complaint on the same day and asked to speak to a manager. On 20 June 2022, the landlord spoke to the resident and agreed to send an urgent management pack to her. This would include the service charge details her prospective buyer asked for. The resident paid the fee, and the landlord confirmed the charges to her, ahead of the pack being sent. The landlord opened a complaint and wanted to resolve the complaint at early resolution.
On 28 June 2022 the landlord sent the resident the management pack. The resident noticed a discrepancy in the service charge amounts between what she had been told on 20 June 2023 and the management pack information. On 14 July 2022 the landlord sent her the correct service charge breakdown.
The resident has told the Ombudsman she had a new buyer on 10 August 2022 and informed the landlord. On 6 October 2022, the resident’s solicitor told the landlord there was a new buyer and the landlord instructed its solicitors. The landlord told the resident it needed a new valuation of the property. The resident was unhappy about this as she believed her valuation from May 2022 was still valid. In October 2022 the resident made a complaint about the landlord’s staff and the errors and delays that she felt had contributed to her missing out on 4 properties she wanted to buy. She was also concerned any further delays would result in losing her mortgage deal.
The landlord acknowledged the complaint and agreed to complete a desktop valuation of the property at no cost to the resident. On 31 October 2022 the resident told the landlord there was an error on the land registry title plan. It showed one of her parking spaces in the wrong place which differed to the lease plan she had signed. She asked for this issue to be added to her complaint.
On 1 November 2022 the landlord sent its stage 1 complaint response to the resident. It confirmed that the resident’s solicitor would need to sort out the title plan but that the landlord would ask its internal legal team if it would investigate. The resident later confirmed the letter had gone to her spam inbox and around 30 December 2022 the resident spoke to the landlord about the complaint.
The resident’s solicitor applied to have the title plan amended and advised the resident it was the landlord’s error. On 23 January 2023 the resident escalated her complaint to stage 2 of the internal complaint process. She said the error with the title plan was the landlord’s fault. It had slowed down her sale and if she did not complete by 6 February 2023 her mortgage rates would be approximately £400 per month more. The landlord did not agree it was at fault and declined to pay for the next valuation report, as it did not take responsibility for the delay. On 28 January 2023, the land registry asked the resident’s solicitor to confirm the landlord agreed that the plan in the counterpart lease was the correct lease plan.
On 16 February 2023 the landlord sent its stage 2 complaint response. The landlord acknowledged it could have supported her better with the land registry query. It offered an apology and £200 compensation for poor communication and inconvenience. It offered £60 reimbursement for a desk top valuation the resident had to pay for. The resident has told the Ombudsman she has not received these payments.

Post internal complaints process

On 3 March 2023, the resident advised the landlord that the stage 2 complaint response did not offer the solution she wanted. She asked for timely assistance in sorting out the title plan and completing the sale.
On 7 March 2023 the landlord wrote to the land registry and confirmed the lease contained an incorrect plan for the property. It attached the correct plan and asked that this prevailed over the one it had executed. By 9 March 2023 the land registry had amended the title plan. On 20 March 2023, the resident completed staircasing to 100% ownership of her property (sale of it) and her new property purchase.
The landlord advised the resident it owed her £61.81 following the staircasing completion. On 20 April 2023 the resident sent her bank details as requested. The landlord confirmed the payment had been sent for approval and the resident could expect it in around 10 working days. On 15 July 2023 the resident asked the Ombudsman to proceed with an investigation. As of 19 October 2024, the resident has told us she has not received the refund.

Assessment and findings

Scope of investigation

The resident has told the landlord and the Ombudsman that the events in this case have negatively impacted their physical and mental health. The Ombudsman does not doubt the resident’s position. However, the Ombudsman does not have the power to determine a causal link between the actions or omissions of a landlord and a resident’s health. Such a determination is more appropriate for the courts. However, the overall distress and inconvenience caused to the resident has been considered in this case. The resident has the option to seek further legal advice if they consider that their mental and/or physical health has been affected by the action or lack thereof by the landlord.
The Ombudsman cannot decide if any party was at fault for advice given or actions taken during the conveyancing process. We will not make a finding on the interpretation of a lease or on a conveyancing matter. This is because it is a matter which is outside of our expertise to determine. This would be a matter for a court or tribunal. The focus of this investigation, instead, will be on the reasonableness of the landlord’s actions, its communication with the resident and whether it followed its own policies and procedures.
This service cannot determine if the landlord is liable for the higher mortgage rate the resident received. This is because only an insurer or the courts can determine liability and any resulting financial damages. Paragraph 42.f. of the Housing Ombudsman Scheme sets out that we may not consider complaints that concern matters where the Ombudsman considers it quicker, fairer, more reasonable or more effective to seek a remedy through the courts, other tribunal or procedure. The resident may wish to consider seeking independent legal advice if she wishes to pursue a liability claim.
On 19 October 2024 the resident told the Ombudsman that the landlord staff were unprofessional and displayed dismissive behaviour toward her, giving examples of this. The Ombudsman cannot determine on this exact matter, as it did not form part of the resident’s complaint to the landlord. Paragraph 42.c. of the Housing Ombudsman Scheme sets out that we may not consider complaints that were not brought to the attention of the landlord as a formal complaint within a reasonable timeframe which could normally be within 12 months of the matters arising. The landlord has not been given the opportunity to investigate this matter. The Ombudsman will investigate the landlord’s poor communication.

The resident’s property sale

On 13 June 2022 the resident told the landlord she needed the property charge information for her prospective buyer before they would proceed. On 20 June 2022 the landlord provided the resident with the property charges if the buyer was purchasing 100% of the property. The landlord also instructed the relevant team to produce a management pack for the resident, that would contain all this information. It took 5 working days to provide the resident with the required information. The Ombudsman finds this to be a reasonable timeframe. The landlord acted reasonably.
In the evidence requested as part of this investigation, there were examples of miscommunication and confusion. There was confusion when the landlord tried to put things right. The landlord had told the resident it would send the resident’s estate agent documents regarding a sale at 51%. When the resident confirmed the sale was at 100% the landlord did not send the information to the estate agent. The landlord did not inform the resident at the time. On 13 June 2022, when the resident asked, the landlord explained why it had not sent the documents and agreed to send them anyway as there would be some information on there that was relevant regardless of the buyer’s percentage purchase. In doing this the resident felt the landlord had sent the wrong information and made a complaint. The landlord did not make it clear to the resident what it had done and caused further confusion and miscommunication on the case. The landlord acted unreasonably. It was not customer focused, and it may have contributed to the resident’s feeling that she had not received a good service, and it had impacted her sale.
The landlord initially told the resident she could only get the property charge information by paying for the management pack. On another call the landlord told her the information could be provided without the pack. On 20 June 2022 the manager told the member of staff who had dealt with the request that in the future she could ask the leasehold team to get the charge information for a resident. If the staff member had known this, it may have resulted in the resident receiving the information sooner. A set procedure or guidelines for staff would prevent misinformation. The landlord acted unreasonably, and the resident may have been confused. The resident got the information within 5 working days and needed to purchase the management pack anyway, for the sale to proceed. The resident has told the landlord and Ombudsman she missed out on a property because of the delay. The Ombudsman does not dispute this but finds that although there was miscommunication the resident got the information in a reasonable timeframe.
On 28 June 2022 the resident received the management pack. It took 9 working days. A management pack contains vital information about a property and to complete it the landlord would need to gather information from different internal sources. The Ombudsman finds 9 working days to be a reasonable timeframe. The landlord acted reasonably, and the resident received the pack in a timely manner, ready for her sale.
The resident noticed a discrepancy between what she had been told on 20 June 2022 and the pack information. On 28 June 2022 she told the landlord and chased it on 6 and 14 July 2022. It took 12 working days for the landlord to provide the correct information. The landlord does not have a sales procedure nor any easily identified timescales for when residents can expect a response on certain matters. Although not excessive, 12 working days seems unnecessarily long to check an error and when chased on 14 July 2022, the landlord was able to produce the correct property charges on the same day. The landlord acted unreasonably. It was aware of the resident’s dissatisfaction and urgency and should have prioritised resolving the error.
On 10 August 2022 the resident’s solicitor told the landlord the resident’s buyer had pulled out of the sale. The resident has told the Ombudsman that she notified the landlord on the same day that she had a new buyer, and that her solicitor had too. There is no written evidence provided that confirms this. On 6 October 2022, the resident’s solicitor emailed the landlord and told them there was a new buyer. The landlord told the resident this was the date it became aware, and it had not received any previous correspondence from her solicitor about a new buyer. The resident has provided an email from her solicitor that stated to her they had been in contact with the landlord. However, it does not provide enough clarity to enable the Ombudsman to determine any failings of the landlord for this delay.
The resident has expressed to the Ombudsman that she puts the fault of the incorrect title plan with the landlord. While some of the evidence does point to that being the case, the Ombudsman cannot determine with certainty where the fault should sit, or what the cause was. This is because 6 years have passed since the title plan was made at the land registry. Various parties were involved from build to sale including the landlord, its solicitors, purchaser’s solicitors, developers and the land registry. The Ombudsman does not have evidence from the time to determine which parties’ actions the error arose from.
The Ombudsman can investigate the landlord’s actions from the point at which it became aware there was an issue with the title plan. With the evidence available the Ombudsman will determine if the landlord acted reasonably and fairly in relation to the recognised error, in all the circumstances.
On 31 October 2022 the resident told the landlord there was an error on the land registry title plan for her property. She was concerned this would further delay her property sale. On 1 November 2022 the landlord told her she should take it up with her solicitor, but that it would ask its internal lawyer whether they could investigate too. The landlord acted reasonably. It offered support with the situation but also provided advice. The resident knew what was happening and what she needed to do.
From the evidence provided as part of this investigation, the landlord started to investigate the title plan issue in January 2023. This was 2 months after the offer to ask its internal lawyer about it. There is no explanation for the delay provided. The landlord acted unreasonably. Paragraph 6.5 of the Complaint Handling Code (the Code) at the time of the complaint, tells landlords they should ensure any remedy proposed must be followed through to completion. The landlord should have had a firmer grasp on the actions required from the complaint response.
On 28 January 2023 the land registry wrote to the resident’s solicitor and advised the title plan could be corrected if the landlord agreed that the plan in the counterpart lease was the correct lease plan. On 30 January 2023 the resident updated the Ombudsman with this information. From the evidence provided it is not clear when the landlord was informed of this development. There was an email from the resident’s solicitor to the resident, that informed her the landlord’s solicitor was away. This points to there being some communication between the parties, but the Ombudsman cannot determine the content of that communication.
At the beginning of March 2023, the landlord and its solicitors agreed to complete a deed of variation for the property, to rectify the issue. This was despite the fact the landlord had told the resident on 23 January 2023 that a deed of variation was not necessary. While it is not unusual for legal matters to have various actions and opinions that could resolve an issue, the land registry had provided a way to resolve it. At this point in the matter, the evidence provided as part of this investigation does not confirm the landlord knew about the land registry’s proposal.
On 1 March 2023, the resident’s solicitor emailed the resident and advised that the landlord had told him it needed to check through the plans for the development as a whole. It is understandable if the landlord needed to make additional checks before making a decision on how to resolve the issue. However, there was a lack of clarity about who should be the points of contact in this sale process. This led to poor communication, with both the solicitor and the resident contacting the landlord about the title plan. The landlord should have made it clearer to the resident how it would communicate.
On 7 March 2023 the resident’s solicitor reiterated the land registry’s suggestion to the landlord. On the same day the landlord’s solicitors sent confirmation to the land registry of the correct plan to use. By 9 March 2023 the land registry had amended the title plan. It took 64 working days for the title plan to be corrected. The landlord acted unreasonably. While the entirety of the delays cannot be blamed on the landlord, its record keeping, and miscommunication contributed to the delays. It was not focused on the resolution.
Where there are admitted failings, as there are in this case, the Ombudsman’s role is to consider whether the landlord’s offer of redress put things right and resolved the resident’s complaint satisfactorily in the circumstances. In considering this, we take into account whether the landlord’s offer of redress was in line with the Ombudsman’s dispute resolution principles: be fair, put things right and learn from outcomes.
The landlord’s stage 1 response offered the following redress:
1. An acknowledgement and apology for the poor communication.
2. Evidence of learning from the complaint.
3. Desk top property valuation at no charge to the resident.
4. Action to ask its internal legal team to look at the title plan.
5. £100 compensation for poor performance.
The landlord’s stage 2 response offered further redress:
1. An apology and acknowledgement that it could have been more supportive around the title plan.
2. Evidence of learning from the complaint.
3. £60 for the valuation the resident had to purchase.
4. £100 for poor communication and £100 for inconvenience.
The landlord’s total compensation and reimbursement offer was £300 as it had deducted £60 from the stage 1 offer to pay for a desk top valuation. This amount of compensation was in line with the Ombudsman’s remedies guidance for a finding of maladministration. It was above the landlord’s compensation guidance of £70 for a service failure that had a high impact on the resident and £100 for upset and inconvenience. It was fair and reasonable of the landlord to pay or reimburse the resident for the valuations where it found itself at fault for the delays.
There is scope within the Ombudsman guidance to offer more for a finding of maladministration and the Ombudsman does not find the landlord’s overall financial remedy to be fair. The communication was disjointed and at times confusing. The resident was understandably frustrated by the situation and worried about her future. The landlord’s records showed most of the communication was instigated by the resident, very little was proactively from the landlord. The resident was inconvenienced by the landlord’s communication, and she overwhelmingly feels that it was the cause of her missed opportunities and current financial burdens.
The Ombudsman is entitled to make its own determination on the level of compensation based on its assessment of the impact of the landlord’s failures when dealing with issues a resident has raised. When considering this impact, the Ombudsman is not limited to a landlord’s compensation policy. Instead, it focuses on what it deems fair and reasonable in the circumstances of the case. The Ombudsman finds, in line with its remedies guidance, a compensation payment of £600 for time, trouble and distress and inconvenience, would have been appropriate.
The Ombudsman’s September 2024 insight report into shared ownership tells us it is vital for landlord’s communication to be clear to support the buyer’s decision making and understanding of the processes. The landlord has told the Ombudsman it does not have a sales policy and procedure. Its website offers some useful, detailed guides around the processes of staircasing and selling. However, the lack of a procedure may have contributed to the poor communication and misinformation the resident received. A recommendation is made below in recognition of this.
There was a lack of recorded evidence of all the communication between the resident and the leasehold / sales team. The Ombudsman does not know if this information exists or not, but is concerned that if information is stored in too many different places this can result in:
1. Landlord staff who are the first point of contact, are unable to help the resident, because they cannot see the history and detail of the issue.
2. Those staff having to pass on messages to other staff, that are logged on 1 system, but the outcome of the message is not logged on the same system.
3. Residents do not know what is happening with their query and cannot get quick current updates when they call the landlord.
4. Difficultly for the landlord and subsequently the Ombudsman to fairly investigate complaints.
The importance of clear record keeping, and management cannot be over emphasised, given the impact it has on landlords’ effective overall service provision. The Ombudsman’s knowledge and information spotlight report (KIM) (May 2023) reveals how landlord’s services can be held back by weaknesses in data and information, that can turn an ordinary service request into an extraordinarily protracted complaint. It further notes that if information is not created correctly, it has less integrity and cannot be relied on. This can be either a complete absence of information, or inaccurate and partial information. The Ombudsman recommends the landlord reviews where different teams store communication and case logs, and the impact this may have on the resident’s customer service experience.
In summary the Ombudsman finds maladministration in relation to the landlord’s handling of the resident’s property sale. While on the face of it many of the landlord’s actions were completed in reasonable timescales, the evidence points to a disjointed service that severely distressed and inconvenienced the resident. The landlord did not offer enough clarity or support around the incorrect title plan. Orders in recognition of this finding are made below.

Associated complaint handling

On 10,13 and 17 June 2023 the resident contacted the landlord to express her dissatisfaction with the service she had received. The landlord did not raise a complaint and evidence showed it wanted to prevent one being raised and organised the relevant staff to call the resident. The landlord’s complaints, comments, compliments and reasonable adjustments policy (CCCRA) at the time adopted the Ombudsman’s definition of a complaint. Internally the landlord used words such as dissatisfied, complaint, expression of dissatisfaction, early resolution and formal complaint. The resident’s communications with the landlord were expressions of dissatisfaction and a complaint should have been raised. The landlord acted inappropriately. At the same time as arranging staff to call the resident, it should have raised a complaint.
On 20 June 2023 the landlord did raise a complaint, but the resident did not receive an acknowledgement. The landlord tried to resolve at early resolution. The landlord’s CCCRA policy tells us that sometimes residents may not want to make a formal complaint and just want things put right. In these circumstances the landlord can use early resolution to try and resolve the issue at the first point of contact. By 21 June 2023 this was not the resident’s first contact about her complaint. No evidence has been provided that suggested the landlord had explained the difference between early resolution and a formal complaint. The landlord acted unreasonably. It was more focused on preventing a formal complaint than being professionally curious to understand the complaint and investigate it.
Paragraph 4.1 of the Code tells landlords that if a complaint is resolved early, the audit trails / records should demonstrate this. The landlord’s records do not provide clarity as to whether the complaint logged on 20 June 2023 was considered resolved by early resolution. The evidence provided as part of this investigation does not include evidence that show the landlord confirmed the outcome of the complaint to the resident. The landlord acted unreasonably. It may have contributed to the resident’s feelings, expressed to the Ombudsman, that there was a lack of a coherent process for complaints and that the overall service was fundamentally deficient.
On 18 October 2022 the resident complained again to the landlord and sent a copy of the complaint to the landlord’s Chief Executive Officer. The landlord acknowledged the complaint the next day and advised it would respond by 1 November 2022, which it did. The landlord’s CCCRA policy had a 5 working day timescale for acknowledgement of the complaint and 10 working days to provide the stage 1 response. The landlord acted appropriately. This time the resident knew what was happening and when to expect a response. The landlord was customer focused.
On 31 October 2022, the resident asked the landlord to add another point to her complaint, about the incorrect title plan. The landlord agreed and responded to it in its stage 1 complaint response the next day. While it was reasonable, in line with paragraph 7.7 of the Code, for the landlord to add the issue to the complaint, it only had a day to provide a response. This may have contributed to the overall delay in resolving the title plan issue. Had the landlord taken more time to investigate, it may have recognised the severity of the issue and resolved it quickly. The landlord had the options to raise a new complaint or extend its timescale for the stage 1 response.
After the landlord sent its stage 1 complaint response it did not hear from the resident. On 28 November 2022 the landlord contacted the resident to check she had received the response. This was good customer service. The response had gone to the resident’s spam inbox. The landlord acted reasonably. It was customer focused and followed up on its response. This enabled the resident to read the response, speak to the landlord and escalate her complaint.
On 23 January 2023 the resident escalated her complaint to stage 2 of the landlord’s internal complaint process. The landlord acknowledged the escalation in 3 working days, within its policy timeframe of 5 working days. On 16 February 2023 it sent the resident its stage 2 complaint response, 15 working days after the acknowledgement. This was well within the landlord’s policy timescale of 20 working days and in line with paragraph 5.13 of the Code that tells us landlords must respond within 20 working days of escalation. The landlord acted appropriately. The landlord’s CCCRA policy could be clearer on whether its response timescales are from the date the complaint was made or escalated, or from the date of acknowledgement. The new 2024 Code has made this clearer.
In summary, there was service failure in relation to the landlord’s associated complaint handling. When the complaint was acknowledged in October 2022, the landlord met its timescales, communicated with the resident and sent out comprehensive responses. However, when the resident first tried to raise a complaint in June 2022, there appeared to be a concerted effort by the landlord to ensure it did not go through the internal complaints process. Had the complaint gone through the process in June rather than October 2022, the landlord’s service to the resident may have improved as a result. In recognition of the service failure an order has been made below.
On 8 February 2024, the Ombudsman issued the statutory Complaint Handling Code. This Code sets out the requirements landlords must meet when handling complaints in both policy and practice. The statutory Code applies from 1 April 2024. The Ombudsman has a duty to monitor compliance with the Code. We will assess landlords using our compliance framework and take action where there is evidence that the requirements set out in the Code are not being met. In this investigation, we found failures in complaint handling. We therefore order the landlord to consider the findings highlighted in this investigation when reviewing its policies and practices against the statutory Code.

Determination

In accordance with paragraph 52 of the Housing Ombudsman Scheme, there was maladministration in relation to the landlord’s handling of the resident’s property sale.
In accordance with paragraph 52 of the Housing Ombudsman Scheme, there was service failure in relation to the landlord’s handling of the associated complaint.

Orders and recommendations

Orders

Within 4 weeks of the date of this report the landlord is ordered to apologise, in writing, for the impact of the failings identified in this report on the resident.
Within 4 weeks of the date of this report, the landlord is ordered to pay the resident £700, made up of:
1. £300 for the time and trouble, distress and inconvenience incurred because of the landlord’s failures in relation to its handling of the resident’s property sale.
2. £40 offered at stage 1 of the complaints process, if not already done so.
3. £260 offered at stage 2 of the complaint process, if not already done so.
4. £100 for time and trouble incurred because of the landlord’s failures in relation to its handling of the associated complaint.
5. This payment must be paid directly to the resident and not used to offset any rent arrears or other amount owed.
The landlord to provide evidence of compliance with these orders to the Ombudsman.

Recommendations

Within 4 weeks of the date of this report the landlord to consider checking it has paid the resident £61.81 due from the completion of the sale and paying the resident if it has not done so.
Within 8 weeks of the date of this report the landlord to consider whether it would improve its sales, staircasing and resales service to have a policy and procedure, which would outline a process, including published customer standards.
Within 8 weeks of the date of this report, the landlord should review its current record keeping practices against this Service’s spotlight report on knowledge and information (May 2023), which sets out the benefits of good record keeping and provides recommendations for landlords.
Within 8 weeks of the date of this report, the landlord should review its current practices against the Ombudsman’s spotlight report on shared ownership (September 2024), which sets out recommendations in relation to managing shared ownership processes and associated complaints.