Applications are open to join the next Housing Ombudsman Resident Panel – find out more Housing Ombudsman Resident Panel.

The Cambridge Housing Society Limited (202125794)

Back to Top

REPORT

COMPLAINT 202125794

The Cambridge Housing Society Limited

26 August 2022


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 landlord’s response to the resident’s request:
    1. to run a business from her property;
    2. for the landlord to waive its fees for the sale of the property. 

Background

  1. The resident is a shared ownership leaseholder, and the landlord is the freeholder. The property is a two-bedroom first floor flat. The resident moved into the property in or around September 2020.
  2. On 5 May 2021, the landlord sent a letter to the resident about an alleged breach of the lease because, as reported by a neighbour, the resident was running a business from her property.
  3. The resident replied that during the purchase process, it was her understanding that her solicitor specifically asked whether she could run her business from home. The resident advised that her solicitor subsequently informed her of the landlord’s consent and that she purchased the property based on this information.
  4. The landlord clarified to the resident that her solicitor, on 7 August 2020, informed it that the resident would be working from home, but specified that she was not running a business. The landlord, based on the solicitor’s statement, gave its consent in September 2020, after the sale of the flat had already been completed, indicating her decision to purchase the property wasn’t based on this consent.
  5. As part of its investigation, the landlord contacted its sales team, which confirmed that it had never agreed with the use of the property for running a business. The landlord then confirmed to the resident that she could not run any business from home as it was prohibited in the lease agreement. The landlord also advised that due to the COVID-19 pandemic, it had agreed for the resident to work from home as an employee of another business only.
  6. The resident made a formal complaint on 20 June 2021. She also indicated she now wished to sell the property and requested that the landlord consider allowing her to ‘staircase’ her ownership share to 100%. She also expressed her frustration at what she considered to be misleading information provided to her when purchasing the property.
  7. The landlord issued its stage one response on 07 July 2021. It reiterated that the lease agreement specifically prohibited any use of the property for business purposes or any activity that may cause nuisance or annoyance to other lessees. It advised that it had received reports of nuisance from her neighbours due to the nature of the business being operated. Regarding her understanding of the consent given, the landlord advised that it considered the problem was due to a miscommunication between the resident and her solicitors. It attached the email sent by the resident’s solicitor when requesting the possibility for the resident to work from home, which noted she would not run a business. The Ombudsman had been provided with a copy of this correspondence which states “our client has advised they are currently working from home for the foreseeable future however note that the Lease prohibits working from home but does not clarify as to whether this relates to having a business from home (which is not what our clients will be doing).”
  8. The landlord reiterated its position in its stage two response, further advising that the resident’s solicitor concluded the purchase proceedings before having confirmation to the request to work from home. The resident remained dissatisfied and requested that the landlord waive its fee in relation to her staircasing request. The landlord subsequently provided advice on the staircasing process but explained that the fee could not be waived. The resident reported in December 2021 that she no longer intended to staircase her ownership of the property. This was due to the fact that the landlord reported to the lender that the resident was in breach of her lease agreement.
  9. The resident referred her complaint to this service as she remained dissatisfied with the landlord’s refusal to allow her to run her business from home.
  10. The resident has also made further complaints relating to rent charges and ASB suffered from a neighbour which have been addressed in a separate formal complaint by the landlord in or around May 2022.

Assessment and findings

Scope of investigation

  1. The Ombudsman notes that complaints regarding rent charges and assertions of ASB received from a neighbor were made in or around February 2022 and responded to in or around May 2022. However, based on the resident’s communications with this service, these issues are no longer in dispute and so have not been considered as part of this investigation.  

Policies and procedures

  1. Section 3.16. of the lease agreement states that a resident must not to use the premises for anything other than as a private residence in the occupation of a single family and not to carry out any trade or business on the premises.
  2. Section 3.17(b) also states that the resident must not do any act or thing which may cause or permit to be caused nuisance, annoyance or disturbance to the owners lessees or occupiers of premises in the neighbourhood or visitors to such premises.
  3. Section 3.21.2 of the lease states that the resident must pay to the landlord a fee of 1% of the sale price for and costs charges or expenses it has incurred for the purpose of or incidental to the assignment.

Use of the property for carrying out a business

  1. As noted above, it is evident that the lease prohibits the use of the property for carrying out a business. It is the Ombudsman’s understanding that such terms are common for residential properties as carrying out a business can result in changes the legal status of the building.
  2. Given that the lease prohibited carrying out a business, having discovered the resident was carrying out a business at the property, it was reasonable for the landlord to have sent a letter informing her she was in breach of the lease.
  3. The resident advised that it was her understanding that her solicitor asked for permission for her to run a business from home before purchasing the property. In its communications with the resident and in its formal responses, the landlord explained that her solicitor reported that she would work from home for the foreseeable future, but this would not involve running a business. The landlord also appropriately attached in its formal response the email received from her solicitor and explained that her misunderstanding was likely due to a miscommunication between her and her solicitor. The landlord maintained that it had been clear regarding running a business and provided consent only in relation to the circumstances described by her solicitor.
  4. As part of its investigation, in June 2021, the landlord contacted its sales team to understand the communications that occurred during the sales process. The sales team consulted its records and reiterated the landlord’s previous position about the communications with the resident’s solicitor. This shows that the landlord appropriately investigated the issue and communicated this to the resident. In the absence of evidence to the contrary, it was reasonable for the landlord to rely on the information given by its staff members in the sales team.
  5. The landlord reiterated to the resident that she could not run her business from home as this was contrary to the obligations set in the lease agreement. The landlord also advised it had received reports that the resident’s business was causing nuisance and annoyance to other neighbours due to customers frequently going in and out of the property. It was appropriate for the landlord to clearly outline the relevant terms in the lease agreement stating the reasons why the resident could not run her business from her flat. The Ombudsman notes that in all its communications, the landlord clearly articulated its position on the matter and helped the resident to understand the nature of the consent given through her solicitor.
  6. The Ombudsman notes that the resident’s position is that the landlord could not refuse her request to run her business from home, according to the government guidelines due to the Covid-19 pandemic. It is the Ombudsman’s understanding that under the government guidelines, while employers have certain obligations in relation to home working, a landlord had no legal obligation to allow a self-employed person to run a business from their property. The Ombudsman notes, however, that the resident has a different opinion on this matter. The Ombudsman is unable to give legal advice, therefore the resident should seek independent legal advice if she wants to pursue this concern.

Staircasing

  1. Following the resident’s stated intention to staircase her share of the property to 100% in order to then sell the property, the landlord appropriately provided advice to the resident on the relevant procedure, in line with best practice.
  2. The resident subsequently requested that any related fees with the staircasing procedure be waived, given that she considered the property to have been mis-sold due to her position on the consent given relating to running a business.
  3. Given, however, that the landlord did not consider it had given consent to run a business, it was reasonable for it to deny her request to waive its fees. Based on the evidence provided to this service, it is not evident that there is any obligation for the landlord to waive its fees in relation to staircasing.
  4. As with above, should the resident wish to contest this position on the basis of interpretation of the lease terms, such a determination would be more appropriate for the courts, and the resident should seek legal advice.

Determination

  1. In accordance with paragraph 54 of the Housing Ombudsman Scheme, there was no maladministration by the landlord in respect of the landlord’s response to the resident’s request:
    1. to run a business from her property;
    2. for the landlord to waive its fees for the sale of the property.