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Anchor Hanover Group (202008567)

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REPORT

COMPLAINT 202008567

Anchor Hanover Group

26 February 2021


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:
    1. The landlord’s decision to withdraw lease amendments in relation to sub-letting in April 2020.
    2. The landlord’s communication with the resident.

Jurisdiction

  1. What we can and cannot consider is called the Ombudsman’s jurisdiction. This is governed by the Housing Ombudsman Scheme. When a complaint is brought to the Ombudsman, we must consider all the circumstances of the case as there are sometimes reasons why a complaint will not be investigated.
  2. After carefully considering all the evidence, in accordance with the Housing Ombudsman Scheme, the following aspect of the complaint is outside of the Ombudsman’s jurisdiction.

The landlord’s decision to withdraw lease amendments in relation to sub-letting in April 2020.

  1. Paragraph 39(i) of the Scheme states:

“The Ombudsman will not consider complaints which concern matters where the Ombudsman considers it quicker, fairer, more reasonable or more effective to seek a remedy through the courts, a designated person, other tribunal or procedure”.

  1. The resident has expressed concern that the landlord has changed the terms of his Lease. A contractual dispute about sub-letting may need settling through the Courts or Tribunal. If the resident has concerns over a potential breach of contract by the landlord in changing its policy in relation to sub–letting, this would be a legal matter, and the resident could seek legal advice if he wishes to pursue it. The resident may wish to seek further legal advice from The Leasehold Advisory Service (LEASE) for further information concerning his options. LEASE is an organisation which offers free advice and guidance to leaseholders.

Background

  1. The resident is the leaseholder of the property. The landlord is the freeholder.  managed by the landlord.

Summary of events

  1. On 14 July 2020 the resident emailed the landlord to seek further clarity on sub-letting his property. He stated that he had purchased the property for his parents previously, although his mother had passed away and his father was unable to live at the property due to his health. The resident stated that he had called in November 2019 and had been advised that sub-letting would be allowed, as long as the landlord was advised, and the tenant was over 55 years old. The resident said he had now been advised that sub-letting was not allowed as of 1 April 2020 and that this was on an application basis only. He had not been informed of any change and had been advised that no communication had been sent. He stated that he had tenants ready to move into the property and asked the landlord to confirm whether he could go ahead with sub-letting the property.
  2. The landlord responded on 15 July 2020 and explained that it had recently reviewed its sub-letting policy to ensure all of the estates it managed were following the same procedure. It advised that whilst sub-letting had previously been allowed on the resident’s estate, this was no longer the case. It noted that it had not made the resident aware that the policy had changed and apologised for any inconvenience this would cause the resident and the proposed tenants.
  3. The resident sent a further email to the landlord on 15 July 2020 and stated that he was aware that when he initially purchased the property that sub-letting was not allowed; however, at the request of other residents, this practice had been allowed. He stated that at the time of the landlord’s merger, he was advised that he would not be disadvantaged by the merger. He stated that the change, which he had not been made aware of, was both significant and costly. He stated that the proposed tenants match the landlord’s criteria for the property and that he did not want to let them down. He requested the landlord to allow them to rent the property. He stated that to enforce the new policy without notification, after confirming that sub-letting was allowed in November 2019, was a strange way to treat a leaseholder.
  4. The landlord responded on 16 July 2020 and advised that sub-letting would not be possible at that stage. It stated that it would further investigate the matter and provide a response to the resident.
  5. The landlord emailed the resident on 17 July 2020 and stated that, as he had been advised he could sub-let the property in November 2019 and he had marketed the property for rent on this basis,  the sublet could go ahead. It noted that it would follow the remainder of its current process and would only allow permission for 12 months. Any new application following this would be made under its new policy. It apologised for any inconvenience this matter had caused the resident and his proposed tenants.
  6. The resident emailed the landlord on 20 July 2020 and stated that he would continue with the letting process and that the contract would be for 12 months beginning in October 2020. He stated he would not seek to find a new tenant once the agreement had ended. He confirmed that he would complete any relevant paperwork and would send the landlord the details of the new tenants.
  7. The resident raised a complaint with the landlord on 25 July 2020 and stated that he was dissatisfied that the landlord had changed the terms of an existing lease agreement without consultation, agreement or consideration of the existing leaseholders. He noted that a lease agreement can normally only be changed with the agreement of both parties. He stated that the contract had been breached in April 2020 and that he had not been made aware of any changes at the time. He stated that he had been disadvantaged by the process as he had lost a potential tenant and potential further rental income. He requested that the landlord reach an amicable resolution.
  8. The landlord acknowledged the resident’s complaint on 5 August 2020. It stated that it aimed to provide a response within 14 calendar days, although due to the impact of the Covid-19 pandemic, this may take longer.
  9. The landlord issued its stage one complaint response to the resident on 12 August 2020 and stated the following:
    1. In 2012 it noted that the Lease was ambiguous regarding sub-letting and it may have been interpreted to permit sub-letting if the occupier is over 60 years of age. A vote was taken in 2012 with the leaseholders where it was agreed the sub-letting was allowed.
    2. This procedure had been brought in at the time due to the market and the flats were difficult to sell. It confirmed that the proposed agreement was stated in a letter in October 2012 and permission would need to be sought from the landlord if any leaseholder wished to consider sub-letting.
    3. It noted that the resident had been advised that he could sub-let the property in November 2019, although stated that the policy changed in March 2020. It apologised that the resident had not been made aware that the sub-letting policies and procedure had changed. This policy would apply where the Lease prohibits sub-letting, as with the lease at the resident’s property.
    4. It was agreed that the resident could sub-let the property to a tenant for a period of 12 months, following which, if he wished to continue to sub-let, he would be required to follow the current policy and procedure.
    5. The landlord stated that it had reviewed the resident’s Lease and found that his Lease prohibited sub–letting under clause 4(x)(a) and provides that this can only be assigned in accordance with clause x (c) (i) and (ii).
  10. The resident requested to escalate his complaint on 13 August 2020. He stated that he was in agreement on most of the points made. He noted that he interpreted the Lease differently and the landlord had not acknowledged that it was stated that nothing would change following the merger. He also explained that a 12-month contract was not viable for elderly residents as their plans are usually longer term. He requested that his complaint was passed to someone with the required authority to resolve the matter.
  11. The landlord emailed the resident on 20 August 2020 to advise the complaint had been escalated. It stated that the resident should be contacted within two working days to discuss the complaint, following this it would review the complaint and provide a written response within 14 calendar days. It explained that this may take longer due to the impact of the Covid-19 pandemic.
  12. The resident emailed the landlord on 25 August 2020 to ask whether he would be contacted, or whether his complaint had moved to review status.
  13. The landlord provided its stage two complaint response to the resident on 8 September 2020 and stated the following:
    1. It confirmed that the Lease contained an absolute clause in respect of underletting. Clause 4 (A) (X) (a) stipulated “not to underlet or part with possession of the demised premises or any part thereof…”. It stated that the Lease, therefore, did not allow sub-letting.
    2. It advised that, as a result of the merger, policies and procedures between the two organisations needed to be aligned; some change was therefore inevitable. It had not included a review date following the vote in 2012 and prior to the merger, the landlord had been reviewing the policy with a view to revert the terms of the Lease in respect of sub-letting. It noted that it had not changed the terms of the Lease but returned to enforcing the clause of the original lease.
    3. It apologised that it had not made the resident aware of the change in procedure regarding sub-letting. It stated that it would ensure all residents were informed of this change in the next estate newsletter as well as sending a letter to all leaseholders. It stated that it was confident that the complaint had been investigated fully and the correct conclusion had been reached.

Assessment and findings

The landlord’s communication with the resident

  1. The landlord may be entitled to change its sub-letting policy and procedure. It would, however, be expected to let the residents which may be affected by such changes aware of the change in advance of the policy coming into place. The landlord would therefore be expected to make leaseholders and those who have expressed an inclination to sub-let aware of this change.
  2. The resident contacted the landlord in November 2019 and had been advised that sub-letting would be permitted as long as the landlord was informed, and the proposed tenant was over 55 years old. He then checked this in July 2020 as he had a tenant lined up to move into his property. The resident has expressed dissatisfaction that the landlord had changed its sub-letting policy in April 2020 and had not made him aware of this change. There remains a dispute between the resident and the landlord as to whether the landlord has changed the terms of the Lease, which is outside the jurisdiction of the Housing Ombudsman.
  3. It has not been disputed that the landlord had not made the resident aware that he would need to apply to sub-let his property and that, if accepted, the agreement would be for a maximum of 12 months before the resident would need to make a further application. There has been service failure by the landlord as it had not made the resident aware of the change in policy prior to this being implemented, knowing that he intended to sub-let the property following a conversation in November 2019. It would have been appropriate for the landlord to write to all residents who had expressed an interest in sub-letting prior to the policy being implemented, to prevent subsequent sub-letting agreements falling through at a later date.
  4. The landlord has acknowledged that its failure to communicate with the resident during this time may have caused some inconvenience to both the resident and his proposed tenants. The resident stated that he had been disadvantaged by the process as he had lost a potential tenant and potential further rental income. The landlord should have told the resident when the policy changed, but it is not possible to directly link the change in policy to the loss of tenants and income. The landlord could have correctly told the leaseholder when the policy changed and this would have still prevented the subtenants from moving in and a similar loss of income.
  5. The landlord should offer an award of compensation in recognition of the inconvenience and distress caused to the resident. It is acknowledged that this compensation may not be comparable to the financial loss the resident has stated he has suffered as a result of the change in process, although it would be a reasonable step taken by the landlord to acknowledge its service failures related to its communication.

Determination (decision)

  1. In accordance with paragraph 54 of the Housing Ombudsman Scheme, there was service failure by the landlord in respect of its communication with the resident.

Reasons

  1. The landlord’s failure to communicate with the resident in relation to the change in sub-letting policy has inconvenienced the resident, who had spent time and trouble marketing the property and arranging the future tenants. The landlord has apologised for any inconvenience but has not offered reasonable redress in recognition of this inconvenience.

Orders

  1. The Ombudsman orders that the following actions take place within four weeks:
    1. The landlord is to pay the resident £150 in recognition of the inconvenience caused by its communication with the resident.

 Recommendations

  1. If it has not already done so, the landlord should write to its leaseholders to inform them of the change to the sub-letting policy.