Southway Housing Trust (Manchester) Limited (202306190)

REPORT

COMPLAINT 202306190

Southway Housing Trust (Manchester) Limited

31 March 2025

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 reports of defects with his new build property.
2. The Ombudsman has also considered the landlord’s complaint handling.

Background

3. The resident is a joint shared owner with his partner. The lease commenced in mid May 2022. The property is a 4-bedroom house that was built in July 2021.
4. In May 2022, the resident and his partner moved in. He raised concerns about the property condition soon after and sent a snagging list of around 130 items the following month. This comprised external and internal issues that included issues with the roof, gutters, fences, grass, grouting, sealant, paintwork, toilet flushes, radiators, handles, and doors. The landlord subsequently created a smaller list of defects and the developer completed some works between July and September 2022.
5. In late September 2022, the resident’s partner arranged a surveyor inspection. Their report listed 87 defects which included issues with brickwork, gaps in internal and external doors, and heat loss. In early October 2022, the resident sent the landlord an updated snagging list that added issues noted by his surveyor. He asked it to complete the snagging list in 2 weeks, otherwise he intended to take the matter further. The same month, the landlord visited the resident and asked the developer to confirm when they would return for works.
6. On 11 November 2022, the resident complained. He noted the landlord had said the developer would complete works in late October 2022, which did not happen. He raised dissatisfaction with the lack of urgency in completing the property to National House-Building Council standards. The same month, the landlord arranged for the developer to attend in line with his availability.
7. On 30 November 2022, the landlord provided a stage 1 response. It noted it sent a list of identified snagging in August 2022, which the developer started on, and it had since asked them when they would return. It noted it had arranged for the developer to attend that day and then return after Christmas. It said that if the developer did not complete the identified snagging it would appoint another contractor. It acknowledged the process had taken longer than expected and this was frustrating. It set out its position on a couple of issues and said the resident would need to provide a surveyor report for claimed heat loss in the property. It said he had 21 days to to escalate the complaint.
8. On 3 January 2023, the resident requested escalation of the complaint. He raised dissatisfaction that the landlord was not addressing all defects, including ones he had provided evidence for.
9. On 8 February 2023, the resident reported a door handle issue and queried what was being done about handles after he had raised them in his snagging report. The same day, his surveyor sent the landlord their September 2022 defect report at his request.
10. In late February 2023, the resident raised dissatisfaction via a councillor. He was unhappy the landlord said his complaint was closed as he was late to escalate it. He noted his surveyor had completed a report and restated dissatisfaction that issues were classed as bad workmanship rather than snags. He noted the landlord had said it would tell him by 17 February 2023 when the developer would return, which had not happened. He explained the issue was causing him significant distress.
11. In early March 2023, the landlord internally circulated a list that included outstanding defects raised by the resident. It noted many items came down to the workmanship and would not be considered defects. It noted it could try to rectify them with the developer but in the meantime it could record why issues were not considered defects for future responses. The landlord subsequently compiled a list of works and scheduled dates for the developer to attend.
12. The landlord provided a stage 2 response on 30 March 2023. It said it believed the property had been built to a good standard, but it accepted there were some defects, which it had experienced issues resolving with the developer. It acknowledged the delays were unacceptable and had caused frustration to the resident. It said it was committed to resolving the defects and a final list was agreed with the developer. It said it would schedule remaining works to a convenient date and arrange for its own contractors to complete them if necessary. It apologised for the service the resident had received and offered £150. It said it would hold a video call with him to reassure him it was committed to complete all identified snagging as soon as possible.
13. In May 2023, the resident says the landlord met with him and said it would complete the works as the developer refused to. The same month, he raised dissatisfaction with its response about various issues and requested information about its definition of a snag.
14. In August 2023, the resident continued to raise dissatisfaction about defects and the landlord’s explanation that some items were excluded from a defects list as they were down to poor workmanship.
15. The landlord met with the resident in October 2023, after which it created an organised list of items. This comprised the items the resident raised in June and October 2022, the items his surveyor detailed in September 2022, and a few items he raised at the meeting.
16. The landlord subsequently commissioned an independent surveyor, who provided a report on 23 November 2023. The report said the property appeared sound and in reasonable condition, “albeit below the standard expected of a new build property.” The report said there were a number of issues relating to poor workmanship that were largely aesthetic, but there were a proportion that affected “the operation and safe occupation.” The report recommended works in respect to wiring, expanding foam, extractor fans, insulation, cladding, verges, brickwork, facades, windows, patio doors, the front door, door gaps, toilet flushes, and internal finishes. These included works to address cold spots and cold air entry points.
17. The landlord sought to agree a list of works and progress them with the resident from early December 2023. It said it would complete the works recommended by the independent surveyor. It set out its position on 189 defects raised by the resident, agreeing action for some but not others.
18. In March 2024, after discussions, the landlord offered to complete the works, which it estimated to cost £80,000 to £100,000, or settle the matter for £32,000. In July 2024, the resident agreed to accept £38,000 and complete works himself, and the matter was referred to the parties’ solicitors to finalise.
19. The resident recently says that progress on resolution of matters has slowed down due to personal reasons. He raises dissatisfaction with various aspects of the landlord’s handling and says the issue has had a significant impact on him.

Assessment and findings

The landlord’s response to the resident’s reports of defects with his new build property

20. In cases such as this, it is not the Ombudsman’s role to assess workmanship and decide what is and is not a defect. Our role is to assess the landlord’s handling of the resident’s reports.
21. The Ombudsman’s spotlight report for complaints about new builds recommends that landlords should:
    1. Pursue defects issues effectively with developers on a resident’s behalf.
    2. Ensure there is effective communication between parties and provide clarity on issues that include:
       1. how to report a defect and how it will respond.
       2. what might be considered a defect.
       3. the length of the defect period.
       4. the process for resolving any outstanding dispute between the resident and the developer at the end of defect period.
22. These points will be considered when assessing whether the landlord’s actions and response to the complaint were fair in all the circumstances.
23. The evidence shows that the resident expressed dissatisfaction with the standard of workmanship soon after he moved into his new build property in 2022. The landlord was positive to arrange for the developer to attend on several occasions and commit to complete works if the developer did not in its November 2022 and March 2023 responses. This reflected provisions in its defects policy for it to instruct other contractors to complete works if the developer does not do so in an acceptable period.
24. The landlord later arranged an independent survey in November 2023 and gave the resident the option for it to complete identified works or agree a settlement. He since agreed to accept a settlement of £38,000 and do the works himself. This has provided a resolution to the defects issue itself which we will not consider. However, the landlord’s overall handling of the resident’s defects reports was poor before October 2023, when it started to satisfactorily consider and address all the issues the resident had raised.
25. The landlord was responsive to the resident’s reports before this, but its approach and communication about what counted as defects was unclear. From when the resident reported defects around June 2022, it did not address all of these and it created smaller lists of what it considered to be and not to be defects. The landlord’s March 2023 records refer to it going through issues and noting justification for why they were not considered defects. This reasonably confirms it had not satisfactorily done this in the previous 9 months.
26. The landlord’s approach was unhelpful and caused confusion to the resident, who was still asking how it defined defects in May 2023. The landlord seemed to recognise this in December 2023, when it said “there has been too much confusion in the past” when discussing defects with the resident.
27. The landlord and developer are understood to not have any affiliation with the National House-Building Council or consumer codes for new builds, and it told the resident in May 2023 that it was working to what was contractually agreed with the developer, not National House-Building Council standards. While it was positive to later agree to arrange the November 2023 survey that considered the property against NHBC standards, this means it did not seem to consider the works against any reasonable objective standards for defects from June 2022 to then. This is 17 months which is a lengthy period.
28. The resident provided the landlord with his independent surveyor’s September 2022 report by February 2023. It is noted the landlord met and spoke with the resident between September 2022 and February 2023, so it seems likely he will have supplied or at least mentioned the report, before it is evident the landlord was sent it in February 2023.
29. The September 2022 defects report was compiled by a surveyor affiliated with the Residential Property Surveyors Association (RPSA). The RPSA are one of the professional associations mentioned in government guidance for buying a home. They also published standards for inspection of snagging in new builds based on specifications by the New Homes Quality Board (one of the organisations who have developed consumer codes for new builds).
30. The resident seemed reasonable to rely on the report and if the landlord disputed the findings, it would be expected to arrange an appropriate survey itself in a timely manner. It is not reasonable that the landlord took at least a further 8 months (from February to October 2023) and chasing from the resident for it to satisfactorily consider the report. Nor is it reasonable that it did not address the report in its March 2023 stage 2 response. While the landlord did some works, this meant some issues went unsatisfactorily unaddressed until the November 2023 report.
31. The resident raised concerns about heat loss at the property due to issues identified in the reports. It is not in the Ombudsman’s expertise to make definitive decisions about liability for such issues, but it is noted the property has an energy performance certificate which estimates the energy it should use. The Ombudsman recommends for the landlord to review energy bills from the resident, if it has not already done so, to assess if his usage is in line with what is estimated or if he has incurred costs it has not addressed.
32. The landlord acknowledged in the complaint timeframe that the resident experienced delays and it awarded £150 for this. It has later internally noted that it needs to learn from issues identified in the independent surveyor’s report to ensure similar issues are avoided in future. It shows it acknowledges there is wider learning in respect to its handling of property handovers and defects reports.
33. However, in the Ombudsman’s view, the landlord has not satisfactorily acknowledged the impact of matters on the resident. The extent of works identified in the landlord’s November 2023 independent survey, and the £38,000 settlement the landlord offered, shows that the defects were much greater than was acknowledged in the previous 11 to 17 months. The resident clearly went to significant time and trouble to get to that point.
34. The resident also says he was suicidal due to the issues. It is not in the Ombudsman’s expertise to make definitive decisions about liability for the impact on health. The wider impact of the defects is also unclear apart from the potential issues with energy efficiency. However, it is understandable that the resident will have been caused much distress by the extent of issues with his new home, as well as by the landlord’s handling and length of time the issue went on.
35. In the Ombudsman’s opinion, the landlord has not satisfactorily acknowledged the issues with its handling and has therefore not fully put things right. This leads us to find maladministration in the landlord’s response about the defects. The landlord should pay the resident £600 to recognise the unacknowledged distress and inconvenience caused by this aspect, in addition to the £150 it previously offered. This reflects what our remedies guidance considers applicable in cases where there has been maladministration and emotional impact, but no permanent impact. This is separate to any settlement about works to the property.

The landlord’s complaint handling

36. The landlord’s stage 1 response was provided around 4 days late. While this was a slight delay, it would have been helpful for the landlord to acknowledge and aplologise for this.
37. The resident then asked to escalate his complaint in early January 2023. It is not evident that the landlord took steps to progress the complaint until late February 2023, after a councillor referred correspondence from the resident. The resident’s correspondence indicates his January 2023 escalation request was declined because this was late.
38. The landlord’s stage 1 response said the resident had 21 days to escalate, so based on this he had until 21 December 2022 to escalate the complaint. However, the landlord’s August 2022 and current complaints policies say complainants have 6 weeks to escalate their complaint.
39. The landlord was positive to later escalate the complaint, but it did not act in line with its policy when it specified a shorter period to escalate and initially declined to escalate the complaint. This meant the landlord’s stage 2 response was provided with a delay of almost 2 months. This led to the resident going to further time and trouble to progress the complaint and will have caused him further frustration.
40. The landlord did not acknowledge the above issues with its complaint handling.  This is not satisfactory. This leads the Ombudsman to find a service failure in the landlord’s complaint handling. The landlord should pay the resident £50 to recognise the unacknowledged distress and inconvenience caused by this aspect.

Determination

41. In accordance with paragraph 52 of the Housing Ombudsman Scheme, there was:
    1. Maladministration in the landlord’s response to the resident’s reports of defects with his new build property.
    2. Service failure in the landlord’s complaint handling.

Orders and recommendations

42. The landlord is ordered, within 4 weeks, to:
    1. Apologise to the resident for the issues identified.
    2. Pay the resident £800 compensation in recognition of the distress and inconvenience caused to him by its handling. This comprises £600 for its handling of the defects, £50 for its complaint handling, and the £150 it previously offered if it has not already paid this. This is separate to any settlement about works to the property.
43. The landlord is recommended to, if it has not already done so:
    1. review the resident’s energy bills to assess if his usage is in line with what is estimated in the property energy performance certificate.
    2. Set out its position on compensation for any excessive energy usage.
44. The landlord is recommended to review if any improvements need to be made to its processes for how it assesses, handles and communicates about new builds defects. As part of this it could:
    1. Consider improvements in processes to ensure it considers and addresses all defect reports in a clear, organised and objective way.
    2. Consider if more internal and external clarity on its definition of defects is required, which references the standards used and examples of common issues which are not considered to be defects.
    3. Consider if its approach requires adjustment in cases where there may be an unreasonably high frequency of issues considered to be poor workmanship rather than defects.
    4. Consider ensuring there is a clear process in place for it to consider arranging an inspection by an independent expert in as timely a manner as possible.
45. The landlord is recommended to review its staff training needs, to ensure staff adhere to its policy timeframes to escalate a complaint in their responses and interactions with complainants.