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The Community Housing Group Limited (202322872)

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REPORT

COMPLAINT 202322872

The Community Housing Group Limited

30 April 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 handling of the resident’s:
    1. Request to purchase the remaining shares in his property.
    2. Associated complaint.

Background

  1. The resident is a shared owner of the property, a 3-bedroom house. The landlord is a housing association. At the time of the complaint the resident owned 50% of the shares in the property.
  2. The resident emailed the landlord on 18 April 2023. He asked it to arrange a valuation of his property as he was considering purchasing all or some of the remaining shares. The landlord arranged the valuation and provided the valuation report to the resident on 5 May 2023. The report outlined that the open market value of the property was £160,000 with an insurance reinstatement value of £176,000.
  3. On 11 May 2023, the resident asked if it was normal practice for improvements to be included in the valuation of the property. He said it felt unfair that he had paid for improvements that had increased the value which the landlord would benefit from. He also advised that he had requested his own valuation that had given a figure of £145,000. He said the landlord’s valuation seemed high and asked how the parties could proceed.
  4. The landlord contacted its estate agent on 12 May 2023. It advised that the resident was challenging the valuation and had asked if the home improvements had been considered. The agent responded to the landlord on 13 May 2023. It advised that the improvements had been factored into the final valuation of £160,000. It said: “Market value was established at £175,000 and then discounted by £15,000 to arrive at £160,000.” The landlord communicated this information in its own email to the resident on 15 May 2023.
  5. On 25 May 2023, the resident emailed the landlord. He asked for advice on how he could speak to someone more senior and/or make a complaint. On 3 August 2023 he told the landlord he was still waiting to hear back on his complaint. On 5 August 2023, the resident completed the landlord’s online complaint form. He said:
    1. He had been attempting to purchase the remaining shares in his property. He found the landlord’s process poor.
    2. The landlord had provided an overpriced figure for the shares.
    3. He believed the landlord had given him false information.
    4. He had lost faith in the landlord’s procedure. He felt the responsible department was not up to the task or was “simply corrupt”.
    5. He had enquired previously about the landlord’s complaints procedure but the complaint had not been progressed.
  6. The landlord issued its stage 1 response on 14 August 2023. It said:
    1. It regretted any miscommunication or misunderstanding regarding the figure provided for purchasing the remaining shares in the property. Its aim was to provide transparent and fair valuations.
    2. It took the resident’s concerns about receiving false information seriously. It would never intentionally provide inaccurate information. It apologised if he felt he had received misleading details.
    3. It acknowledged that there might have been confusion in the valuation process and regretted any frustration this may have caused the resident.
    4. It found the resident’s concerns about his complaint being ignored or dismissed concerning. It apologised for the communication breakdown that had led to this.
    5. It acknowledged the resident’s concerns about the difference between its agent’s valuation and the ‘red book valuation’ (a formal property valuation conducted to defined standards). It noted that the valuation process took various factors into account. It appreciated his efforts in seeking multiple valuations.
  7. The resident escalated his complaint on 20 August 2023. He said that he felt “deflated” on receiving the landlord’s stage 1 response. He recognised the landlord had acknowledged his concerns and dissatisfaction but said it had not provided any explanation or indicated that it had investigated his points. He said this added to the dissatisfaction he had felt since April 2023. To resolve his complaint, he asked the landlord to provide evidence that its agent had valued the property at £175,000. He also said he expected the landlord to show that there had been a 12–month wait for the District Valuer (a government agency responsible for providing valuations and property advice). Further, he requested evidence to show that the staff member had referred his complaint to the complaints team when he initially made it on 25 May 2023. As an additional outcome, he asked the landlord to refund the sum of £350, which he had paid for the red book valuation. He said answers to these points would satisfy his complaint.
  8. The landlord sent its stage 2 response to the resident on 14 August 2023. It said:
    1. There was no breakdown of the “£15,000 works that reduced the valuation down”.
    2. The complaint had been logged on 7 August 2023.
    3. Regarding the resident’s discussion with the District Valuer, their delay was 2-3 months, not the 12 months the landlord had advised.
    4. It was going to review how it dealt with the valuation process and the company it used.
    5. It agreed the service it had provided was not in line with the standards it set itself.
    6. It apologised and offered the resident £350 to cover the cost of the red book valuation, and a further £100 for its failure to log his complaint and communicate effectively.

Assessment and findings

Scope of the investigation

  1. In his communication with us the resident has alleged he felt the landlord’s process was corrupt and it had given him false information. It is beyond our remit to make a legal finding of criminality. This would be a matter for the courts to determine, where appropriate evidence could be given and the relevant legislation applied to the circumstances. The resident has the option to seek legal advice if he wishes to pursue this. Our investigation has considered the landlord’s response to the resident’s concerns.


 

The resident’s request to purchase the remaining shares in his property

  1. The lease allows the resident (as leaseholder) to purchase shares in the property. The market value of the property will be determined by ‘the valuer’. This is an independent expert who is an associate or fellow of the Royal Institute of Chartered Surveyors (RICS) agreed between the landlord and the leaseholder. The value of any improvements made by the resident to the property must be discounted from the overall valuation. Once notified by the leaseholder that they wish to purchase the shares, the landlord must instruct the valuer within 14 days and provide the valuation report to the leaseholder within 7 days of receiving it. The lease requires the leaseholder to pay the cost of the valuation and states that the decision of the valuer is final and binding on the parties.
  2. The landlord submitted a number of policy documents in relation to its home ownership schemes. However, the policies provided did not outline the steps to be taken upon receipt of a request from a resident to purchase shares in a shared ownership property. For this reason, we have relied upon the lease as the overarching contractual document relating to staircasing and the purchase of shares.
  3. The landlord’s compensation policy allows it to pay compensation where there has been a failure of service that has caused a resident loss, detriment or inconvenience. The landlord can offer an inconvenience or goodwill payment of up to £100. For instances of extended periods of inconvenience, due to loss of services, payments of up to £1,000 can be awarded.
  4. In line with the lease, the landlord arranged for the property to be valued and provided the valuation document to the resident within the required timescales. In allocating an agent to conduct the valuation there was no explicit agreement between the parties. However, the landlord did provide the name of the agent to the resident, who agreed for his details to be shared. The resident did not object to the use of that agent or indicate a preferred agent of his own. While it would have been helpful to have obtained documented agreement, the evidence suggests there was tacit agreement between the parties to proceed with the agent put forward by the landlord. Further, this agent had provided a previous valuation on the property in 2020 and was therefore familiar to both parties.
  5. On 5 May 2023, the landlord forwarded the valuation report to the resident. It advised the agent had valued the property at at £160,000. This meant the remaining 50% of the shares would cost the resident £80,000. The valuation report did not indicate if the agent had included any discount associated with improvements to the property. While we acknowledge that the landlord was not responsible for preparing this document, the absence of this information was unhelpful and created uncertainty for the resident.
  6. On 11 May 2023, the resident asked the landlord whether the discounts for the improvements he had made to the property were included in the valuation. He also advised that he had obtained his own valuation, which was £15,000 lower. The landlord emailed the agent on 12 May 2023 to follow up on the resident’s concerns. This was positive and demonstrated a willingness by the landlord to pursue answers to his questions in a timely manner.
  7. The agent responded to the landlord on 13 May 2023. It confirmed it had applied a £15,000 discount to the valuation which had brought the purchase price down from £175,000 to £160,000. The landlord communicated this to the resident in an email on 15 May 2023. It replicated the wording in the agent’s email (which was submitted as evidence to this Service), stating the improvements to the property had been “pre factored into the final price of £160,000”. It clarified that “the market value had been established at £175,000 and then discounted by £15,000 to £160,000”. The landlord said the resident could approach the District Valuer to redetermine the value, but that this could take up to 12 months due to a work backlog. It was appropriate for it to inform him of his options and provide relevant information about timescales.
  8. In its email, the landlord did not indicate that the information had come directly from its agent. We acknowledge that there may have been contractual reasons that prevented the landlord from sharing the email from the agent. However, it would have been especially beneficial in this instance as it contained the specific information the resident had requested. At the very least we would have expected the landlord to tell him it had contacted the agent and confirm that the information in the response had come from the agent. It would also have been helpful if the landlord had explained why it could not share the agent’s email (if this was the case). Its lack of openness and transparency was unreasonable and left the resident unnecessarily doubting the information he was given. This caused him frustration and further uncertainty.
  9. On 17 May 2023, the resident told the landlord that he had visited its agent who confirmed the valuation as £160,000, based on the current property condition. He said once the £15,000 discount had been applied the price would be £145,000. The same day the landlord told the resident that a “qualified valuer” had undertaken the valuation and that he would need to challenge the valuation directly with them. This was an unhelpful response. The communications show there was some discrepancy between what the agent had presented to the landlord and what the resident understood. Given the large sums of money involved, it would have been reasonable for the landlord to engage sufficiently with the resident to ensure he was clear on the valuation.
  10. The agent contacted the landlord on 19 May 2023. It advised it had spoken to the resident and had confirmed the valuation of “£160,000 to be extremely fair and realistic based upon robust market evidence”. It told the landlord it had conducted an “indexing sense check” using one of the main building society websites. It included a screenshot of the website valuation, which came out at £158,425. It said the real market value would be higher as the improvements had been disregarded. It confirmed that it did not usually employ indexing as the pricing was “generally on the conservative side”. Instead, it used market comparisons in line with RICS guidance. It went on to state: “For the avoidance of doubt, my opinion/original report remains unchanged. Again, indexing was not used as a direct valuation tool.” The agent’s communications to the landlord demonstrate that the landlord was conveying the correct figures to the resident. However, after receiving the agent’s email, it again did not engage with him to clarify the matter and communicate the additional information. This was unreasonable and a missed opportunity to avoid the forthcoming complaint.
  11. The resident emailed the landlord on 25 May 2023. He advised he had obtained 4 valuations for the property that were all lower than the landlord’s. He again said he did not want to wait 12 months for the District Valuer for something “that could be resolved with sensible negotiations”. The resident then asked for advice on how he could speak to someone more senior within the landlord’s organisation and/or how to make a complaint.
  12. The staff member dealing with the case appropriately emailed a manager in the development and sales department the same day. They explained the resident was disputing the valuation. They asked if it would be acceptable to consider an average of all of the valuations. The manager’s response was, “It must be a red book valuation – estate agent valuation is meaningless for us.” The staff member relayed this information to the resident. However, they did not say that they had checked with management or consulted internally. It would have been helpful to let the resident know this so that he was aware that senior staff were involved as he had requested. Further, the landlord should have informed the resident from the outset that only a red book valuation would be accepted. Not providing this information resulted in time and trouble for him in seeking out his own valuations.
  13. The resident provided the red book valuation to the landlord on 18 June 2023. The valuation had come back as £155,000. After applying the £15,000 discount for improvements, this gave a purchase price of £140,000. He asked it to confirm that his remaining share would therefore cost £70,000. The landlord did not respond, which was unreasonable and frustrating for the resident. He contacted it again on 21 July 2023 requesting confirmation it would be happy to proceed with the red book valuation. The staff member dealing with the case forwarded the resident’s request to management for approval. The request was approved. On 24 July 2023, the landlord informed him that the purchase price of £140,000 as detailed in the red book valuation had been agreed. This was a positive step by the landlord and showed reasonable discretion in stepping away from the lease which advised the decision of the initial valuer was binding.
  14. As part of his complaint, the resident asked for the £350 charge associated with the red book valuation to be refunded to him. The landlord agreed to this, which again was reasonable. It also offered £100 as compensation for its poor communication and failure to log his complaint. It would have been helpful if the landlord had clarified what proportion of the compensation was allocated to each aspect. In absence of this information, we have assumed £50 for the failure to log the complaint and £50 for its poor communication.
  15. Throughout the timeline of the case the landlord missed opportunities to communicate effectively about the process for purchasing shares. We would have expected it to outline the process to the resident upon his first contact to ensure he understood the actions the landlord would take and what his options were. When it came to the figures associated with the agent’s valuation and the discount associated with repairs, the landlord could have done more to provide clarity and transparency to the resident. This would have shown it was communicating the correct information and not the false information the resident suspected.
  16. However, the landlord did not enforce the strict clauses in the lease and agreed to the lower purchase price. It also refunded the cost of the red book valuation, which it was not obliged to do, and awarded compensation for poor communication. Further, the landlord apologised for its failures and advised it would be changing its agent and updating its policy. This showed a willingness to acknowledge and learn from its mistakes. In all the circumstances of the case, we find the landlord’s actions amount to reasonable redress.

Complaint handling

  1. The landlord’s complaint handling policy defines a complaint as “an expression of dissatisfaction, however made, about the standard of service, actions or lack of action by it, its staff, or those acting on its behalf, affecting an individual customer or group of customers”. The policy allows complaints to be made online, by email, phone, text or in person. The landlord commits to acknowledging stage 1 complaints within 1 day of receipt and providing a response within 10 working days. Stage 2 requests will be acknowledged within 3 working days and responded to within 20 working days.
  2. In an email to the landlord on 25 May 2023, the resident expressed that he was dissatisfied with its handling of his case. He said he wished to “speak to someone higher up and/or make a complaint”. This was a clear indication that he wanted to complain. The same day the staff member advised they would “refer his email on”. They did refer the email to a manager for advice on the valuation aspect. However, they did not forward the email to the complaints team or inform them about the complaint. This was a failure to comply with the landlord’s own policy and the Ombudsman’s Complaint Handling Code (‘the Code’). The landlord’s lack of action on this aspect introduced unnecessary delays and caused further frustration and doubt for the resident.
  3. On 2 August 2023, the resident told the landlord he was still waiting to hear about his complaint. The same staff member told him they thought the complaint had been resolved when the purchase price had been lowered. This was an unreasonable assumption, as no one had discussed the complaint with the resident to determine what aspects he was complaining about.
  4. The resident completed an online complaint form on 5 August 2023. Positively, the landlord met with the resident to discuss his complaint points. It also correctly acknowledged and provided its response within the timescales outlined in the policy. However, the stage 1 complaint did not show that the landlord had investigated the complaint. It acknowledged the resident’s feelings and apologised but provided no reasoning or answers to the points that he had put forward. This was a missed opportunity to resolve the complaint at the earliest stage. It was also a failure to comply with the Code, which requires landlords to answer all complaint points. The stage 1 response was frustrating for the resident and caused him time and trouble pursuing a stage 2 response.
  5. On 4 September 2023, the resident said he wanted proof that the landlord’s agent had valued the property at £175,000. In reply, the landlord forwarded the original valuation that he already possessed. This left the resident feeling unheard and frustrated that it had not given him the specific information he requested or provided reasons why. He then made a further request for this specific information, as well as evidence that the staff member had forwarded his complaint on 25 May 2023.
  6. The landlord’s stage 2 response again failed to provide satisfactory answers to the resident’s questions. In its email on 13 May 2023, the agent had clearly stated that it had valued the property at £175,000. Even if the landlord did not want to share the entire email, we would have expected it to have quoted the text and explained it to the resident (as highlighted above). This amounts to a failure in complaint handling as well as in respect of the substantive matter. Failing to take these simple steps increased the resident’s frustration and further diminished his trust in the landlord’s processes.
  7. In response to the resident’s request about his initial complaint, the landlord simply said the complaint had been logged on 7 August 2023. This was an additional failure to provide readily available information that would have resolved the resident’s query. Unreasonably, the landlord failed to adequately address the resident’s complaint at stage 2, which caused him additional time and trouble in bringing the complaint to us.
  8. Overall, the landlord’s complaints procedure did not function as expected and did not put things right for the resident. The landlord failed to log a complaint in the first instance and did not provide answers to the resident’s complaint points at either stage of its procedure. We have therefore made a finding of maladministration in the landlord’s complaint handling.
  9. The landlord offered compensation for failing to log the resident’s complaint. However, we do not believe the amount was sufficient for the additional issues identified above. We have therefore made an order for the landlord to pay an additional £100 compensation. This is in line with this Service’s remedies guidance for circumstances where the resident was adversely affected, but there was no permanent impact.

Determination

  1. In accordance with paragraph 53.b of the Housing Ombudsman Scheme, there was reasonable redress in the landlord’s handling of the resident’s request to purchase the remaining shares in his property.
  2. In accordance with paragraph 52 of the Housing Ombudsman Scheme, there was maladministration in the landlord’s handling of the resident’s complaint.

Orders and recommendations

Orders

  1. Within 4 weeks from the date of this report the landlord must:
    1. Provide a written apology from a senior manager to the resident for the failures associated with its complaint handling. The apology must meet the criteria highlighted in the Ombudsman’s apologies guidance.
    2. Pay the resident £100 for the distress, inconvenience, time and trouble associated with its handling of his complaint. This in addition to any money already offered for complaint handling.
  2. The landlord must provide evidence of compliance with the above orders within the time limits specified.


Recommendations

  1. If it has not already done so, the landlord should pay the resident the £100 compensation it offered in its stage 2 response. Our finding of reasonable redress is made on the basis that this payment is made.
  2. The landlord should create a staircasing procedure that adequately outlines the process and arrangements for the purchase of shares in shared ownership properties.