Peabody Trust (202312556)

REPORT

COMPLAINT 202312556

Peabody Trust

19 July 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:
1. The landlord’s sale of a shared-ownership property.
2. The landlord’s handling of repairs, including its level of communication.
3. The landlord’s handling of the resident’s decant from the property.
4. The landlord’s decision to charge the resident rent and service charges.
5. The landlord’s handling of the associated complaints.

Background

The resident lives in a 2-bedroom ground-floor flat under a shared-ownership lease agreement. The building was constructed by a third party, which is also the freeholder. The landlord leases the property from the freeholder.
There was a leak from the roof of the building on 24 October 2022. Repairs to the roof were undertaken by the freeholder around this time. On 16 November 2022, there was a further leak in the roof which resulted in the electricity supply to the building being isolated and the resident being decanted from the property.
The resident raised a complaint on 5 April 2023. The resident was dissatisfied that:
1. the landlord continued to charge her rent and service charges
2. the landlord had increased her rent and service charges despite being unable to live in the property
3. she had been decanted from the property since November 2022
4. the repairs had not been completed
In its stage 1 complaint response on 2 May 2023, the landlord:
1. explained that the repairs to the building were the responsibility of the freeholder and not the landlord
2. under the terms of the lease agreement, the resident remained liable to pay rent and service charges
3. the resident was receiving alternative accommodation and therefore a suspension of the rent or service charges would be ‘double recovery’
4. acknowledged it was frustrating for the resident that the landlord was unable to confirm when she could return to the property
5. explained it was applying pressure on the freeholder to progress the repairs
6. explained it had instructed its own independent expert to assess the repairs proposed by the freeholder
7. stated it hoped the freeholder would be able to provide an update on the repairs at the next tenants meeting
8. confirmed it would not suspend the resident’s rent or service charges, and explained it was a not-for-profit organisation which had a duty to use its limited resources for the benefit of all its residents
The resident escalated her complaint on 5 May 2023. The resident remained dissatisfied that:
1. she had not received a planned programme of work for the repairs
2. the landlord had sold her a property which she believed it knew or ought to have known was defective
3. the landlord’s updates on the repairs were poor
4. the payments from the landlord were delayed
5. the landlord knew or ought to have known that the property was unsafe around 2 weeks before she was decanted
In its stage 2 complaint response on 12 June 2023, the landlord:
1. apologised for the distress and inconvenience caused by having to be decanted from the property for an extended period
2. stated it had maintained continuous communication with the freeholder about the repairs since October 2022
3. explained that in circumstances where the landlord does not have responsibility for the building, its policy was that residents should reclaim their costs from the freeholder’s insurance provider
4. explained the freeholder did not provide relevant details about its insurance provider when the landlord requested it, and therefore the landlord arranged alternative accommodation between 18 and 23 November 2022
5. stated that since November 2022, the resident had declined to use the insurance provider’s alternative accommodation service and had opted to arrange her own accommodation
6. stated the insurance provider had refused to handle the resident’s expenses directly, and therefore the landlord had decided to reimburse the resident and reclaim those costs from the insurance provider itself
7. explained that there was no process for it to do this defined in its policy, and therefore it took time for the necessary authorisations to be made to reimburse the resident each time a claim was made
8. reiterated that the resident remained liable for her rent and service charges in full
9. stated that it had maintained contact with the resident since December 2022 about the repairs, but acknowledged there had been some lapses in this time and apologised for this
10. offered £600 compensation comprised of:
  1. £500 for time, trouble and inconvenience
  2. £100 for the delay in responding to the resident’s complaint
This service understands that the internal repairs were completed in August 2023, and the repairs to the roof were completed in October 2023.
On 1 December 2023, the landlord offered the resident £4,000 compensation for the time, trouble, and inconvenience caused.

Assessment and findings

Scope

In her complaints, the resident was dissatisfied that the landlord had increased her rent and service charges whilst she was decanted from the property. Paragraph 42(d) of the Housing Ombudsman Scheme states:

42. The Ombudsman may not consider complaints which, in the Ombudsman’s opinion: d. concern the level of rent or service charge or the amount of the rent or service charge increase

Challenges to rent or service charge increases fall under the authority of the first-tier tribunal. If the resident remains dissatisfied with the rent and service charge increases, she should take independent professional legal advice.
This service will consider the landlord’s decision to continue to charge the resident rent and service charges, and whether this was fair and reasonable in all the circumstances.
The resident’s complaints relate to matters which also concern the actions of the freeholder and its agents. Paragraph 41(b) states:

41. The Ombudsman cannot consider complaints which, in the Ombudsman’s opinion: b. concern matters which do not relate to actions or omissions of a member of the Scheme

The freeholder is not a member of the Scheme. Therefore, although this service may describe the actions of the freeholder or its agents as a matter of fact, it is not within the Ombudsman’s jurisdiction to comment on whether those actions were appropriate. This service will consider the actions of the landlord, and whether those actions were fair and reasonable in all the circumstances.

The landlord’s sale of the shared-ownership property

The evidence indicates that construction of the building was completed on 17 June 2022. The freeholder provided the landlord with various documentary evidence to confirm the property’s completion, including an NHBC building control certificate and a certificate of practical completion.
The resident completed purchase of the property on 29 July 2022. In her complaints, the resident explained she was dissatisfied that the landlord had sold her a property which was defective.
There is no evidence on which the Ombudsman could conclude that the landlord knew or ought to have known that the roof of the building was defective at the time of the sale. Furthermore, in the Ombudsman’s opinion, it was the resident’s responsibility to satisfy herself as to the condition of the property prior to completing the purchase. Often buyers are advised to obtain surveys.

The landlord’s handling of repairs

The lease agreement between the freeholder and the landlord states that the freeholder retained responsibility for the structure of the building, including the roof. The certificate of practical completion also confirmed that the freeholder remained responsible for defects which were identified within the defect liability period, which expired on 16 June 2023.
Another resident of the building informed the landlord’s out of hours service of the roof leak on 16 November 2022. The leak resulted in water coming through the roof and into the electrical riser cupboards on every floor of the building. The fire service was also in attendance.
The evidence indicates that:
1. the landlord was informed of the leak at or around 11pm
2. the landlord immediately informed the freeholder about the leak
3. at or around 11:30pm, the landlord arranged for an electrician to attend as a matter of urgency
4. at an unknown time between 12am and 9am on 17 November 2022, the landlord decanted the resident to a hotel
5. at or around 4am on 17 November 2022, the electrician isolated the electricity supply to the building
In the Ombudsman’s opinion, the landlord’s initial response to the leak was appropriate. The evidence indicates that it acted quickly to inform the freeholder and move the resident to safety.
In January 2023 the freeholder proposed to repair the roof by draining the water from the roof and applying a new watertight membrane. In response, the landlord instructed its own expert construction consultant to advise it on the adequacy of the freeholder’s proposed repairs.
The evidence indicates the landlord asked the freeholder to provide it with further information and documentary evidence for it to undertake its own independent evaluation. It also raised various concerns that the freeholder’s planned repairs would not be sufficient. This is an example of good practice.
In February 2023, the landlord instructed solicitors because the freeholder had not provided it with sufficient assurances and documentary evidence concerning the inspections it had carried out and the adequacy of the repairs identified. Again, the landlord acted appropriately here.
A draft programme of works was provided by the freeholder on 14 April 2023, and the landlord provided a copy of this to all residents on the same date.
The landlord was not satisfied with the freeholder’s proposed repairs and instructed its own independent expert to inspect the roof. That expert produced a technical report on 25 May 2023. The landlord acted reasonably in taking this action.
The landlord’s technical report concluded that there was a defect in the original construction of the roof and the freeholder was responsible for repairing it. The report also concluded that the freeholder’s proposed repairs were inadequate, and recommended an alternative schedule of repairs, which included full replacement of the roof.
The landlord’s solicitors provided the freeholder with a copy of the technical report on 12 June 2023, summarised the recommendations, and advised the freeholder that if it did not undertake the repairs recommended in the report, the landlord would bring legal proceedings to compel it to do so. The landlord acted appropriately in taking this action.
It is the Ombudsman’s opinion that the landlord’s actions were reasonable and appropriate to compel the freeholder to complete repairs which were full and effective. This included obtaining independent expert advice and instructing solicitors to apply pressure on the freeholder to complete the repairs. Although this contributed to the delay in the repairs being started, it was necessary. Indeed, had the landlord not taken these actions it is likely that the Ombudsman would have had grounds to criticise its handling of the repairs.

The landlord’s communications about the repairs

The evidence indicates the landlord held open meetings with all tenants of the building on at least 8 occasions between 13 December 2022 and 26 September 2023. Minutes from those meetings indicate the residents were provided with and made use of extensive opportunities to put questions to both the landlord and the freeholder.
Furthermore, the evidence indicates the landlord provided residents with updates about the repairs on various occasions, which included at least 24 email updates between 23 December 2022 and 4 August 2023.
In the Ombudsman’s opinion, the landlord’s level of communication about the repairs was not unreasonable.
In her complaints, the resident also expressed dissatisfaction with the quality of the landlord’s communications. The Ombudsman understands that it would have been desirable to the resident for the landlord’s communications to be more detailed about the repairs. However, there is no evidence on which the Ombudsman could conclude that the landlord’s communications about the repairs were inaccurate. The evidence indicates that the landlord shared what information it had available at the time of the communications.

The landlord’s handling of the resident’s decant from the property

The landlord’s alternative accommodation policy states that it will decant residents in an emergency where it is unsafe for them to remain in the property. The policy does not apply to leaseholders and where the landlord is not the freeholder. Despite this, the evidence indicates the landlord decanted the resident to a hotel in the early hours of 17 November 2022, when it became apparent that the electricity supply to the building would have to be isolated. This was appropriate, as the landlord went beyond the obligations in the lease and its policy.
In her complaints, the resident was dissatisfied because she believed the landlord knew or ought to have known that the property was unsafe prior to 17 November 2022. There is no evidence on which the Ombudsman could conclude that the property was unsafe prior to 17 November 2022. The evidence indicates the property became unsafe following the flood in the building on that date.
The resident was offered alternative accommodation by the freeholder’s insurance provider. The resident declined this because the accommodation offered by the insurance provider was not ‘like-for-like’. The landlord cannot be held responsible for this.
The resident decided to arrange her own alternative accommodation until she returned to the property in or around October 2023. In her complaints, the resident was dissatisfied that:
1. there was a delay in receiving payments from the landlord
2. she was not given sufficient notice to extend her stay in alternative accommodation, meaning she had to move several times
In its stage 2 complaint response, the landlord explained that in these circumstances, it would expect residents to liaise directly with the insurance provider to either arrange alternative accommodation or arrange payment for their own alternative accommodation. It explained it had acted outside of its policy to reimburse the resident’s costs and reclaim those costs from the insurance provider itself.
In the Ombudsman’s opinion, the landlord’s actions went beyond its obligations to the resident and allowed her greater choice about her alternative accommodation. The landlord also explained that this process required the resident’s receipts to go through an authorisations procedure, which took time to process. It stated that if there had been any financial detriment caused to the resident by these delays, it would consider compensating her for this. In the Ombudsman’s opinion, this was reasonable in the circumstances.
There is no evidence on which the Ombudsman could conclude that the delay in reimbursing the resident’s costs caused a financial detriment to her.
The evidence indicates that when the resident was informed her decant had been extended, this was often at short notice and for a short period of time. The Ombudsman acknowledges that it would have been highly desirable to the resident if she had been given further notice, as it would have allowed her the opportunity to remain in situ, rather than repeatedly move.
The landlord was not responsible for deciding when or for how long the resident’s decant would be extended. This was decided by the freeholder’s insurance provider. The evidence indicates the landlord informed the resident about the insurer’s decision as soon as it was aware. The Ombudsman cannot fault the landlord for this.
It is positive to note that the landlord did acknowledge the resident’s frustrations and explained it had asked the insurance provider to be more timely in its decisions. Furthermore, on at least one occasion, the landlord gave the resident assurances that if the insurance provider did not make its decision before the decant was due to expire, it guaranteed to reimburse the resident’s costs. Again, this went beyond the landlord’s obligations to the resident in this case.

The landlord’s decision to charge the resident rent and service charges

The lease agreement states that the resident is responsible for paying rent and service charges to the landlord. The lease agreement does not provide for any circumstances in which the resident may choose not to pay the rent or service charges.
In her complaints, the resident was dissatisfied that she had been charged rent and service charges by the landlord despite not living at the property. In resolution of her complaint, she wanted some or all these charges to be refunded.
In its complaint responses, the landlord explained the resident was liable to pay the rent and service charges under the terms of the lease. It also explained that refunding all or part of her rent would not be justified, because she was receiving alternative accommodation and would therefore benefit from ‘double recovery’.
The evidence indicates the resident’s service charges were management fees, which were passed on to the estate management company nominated by the freeholder. There is no evidence on which the Ombudsman could conclude that these charges were not due because the property was not habitable at the time of the resident’s complaint.
In the Ombudsman’s opinion, the landlord’s decision was reasonable. It reached a decision it was entitled to make under the terms of the lease and explained that decision to the resident.

The landlord’s handling of the associated complaints

The landlord operated a 2-stage complaints policy. The policy states that the landlord will provide a stage 1 complaint response within 10 working days of the complaint being logged. The landlord will provide a stage 2 complaint response within 20 working days of the complaint being escalated.
The resident raised a complaint on 5 April 2023. The landlord provided its stage 1 complaint response on 2 May 2023, which was 17 working days later. This was not appropriate as it was not consistent with the landlord’s policy.
The resident escalated her complaint on 5 May 2023. On 6 June 2023, the landlord explained it needed further time to respond to the resident’s complaint and gave an extended deadline to 12 June 2023.
The landlord provided its stage 2 response on 12 June 2023, which was 24 working days after the resident escalated her complaint. This was reasonable as the delay was short and had previously been explained to the resident.
In its stage 2 complaint response, the landlord apologised for the delay in providing its complaint responses. The landlord offered £600 compensation, of which £100 was offered for the delay in responding to the resident’s complaints. In the Ombudsman’s opinion, this was reasonable, as it was consistent with the Ombudsman’s Guidance on Remedies.
The Ombudsman notes that in December 2023, the resident was offered £4,000 compensation for the delay in completing the repairs.
Considering all the circumstances, it is the Ombudsman’s opinion that the landlord has made an offer of reasonable redress which satisfactorily resolves the resident’s complaint.

Determination

In accordance with paragraph 52 of the Housing Ombudsman Scheme, there was no maladministration by the landlord in the sale of the shared-ownership property.
In accordance with paragraph 52 of the Housing Ombudsman Scheme, there was no maladministration by the landlord in its handling of repairs, including its level of communication.
In accordance with paragraph 52 of the Housing Ombudsman Scheme, there was no maladministration by the landlord in its handling of the resident’s decant from the property.
In accordance with paragraph 52 of the Housing Ombudsman Scheme, there was no maladministration by the landlord in its decision to charge the resident rent and service charges.
In accordance with paragraph 53(b) of the Housing Ombudsman Scheme, the landlord has made an offer of reasonable redress which, in the Ombudsman’s opinion, resolves the complaint about the landlord’s complaint handling satisfactorily.

Recommendations

The Ombudsman recommends the landlord pay the resident the compensation it has previously offered, if it has not already done so.