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Catalyst Housing Limited (202118576)

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REPORT

COMPLAINT 202118576

Catalyst Housing Limited

23 May 2023

 

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:

  1. the resident’s transfer of equity application;
  2. the associated complaint.

Background

2.     The resident is a shared owner of a flat in a purpose-built block owned by the housing association landlord.

3.     The resident held a joint tenancy agreement on the property with her ex-partner. Under their divorce settlement, they agreed to transfer the equity in the property to the resident, for which the resident had obtained a mortgage offer. On 11 July 2021, the resident sent the mortgage offer to the landlord and asked it to start the process of transferring the equity.

4.     The landlord responded on 22 July 2021 and confirmed it received the mortgage offer. It requested that the resident complete the Transfer of Equity Pack, which it attached to the email. It also said the resident needed to pay an administration fee of £50. The landlord said that once it received all completed paperwork from the resident, it would review the case and contact the resident’s solicitor to proceed.

5.     The resident emailed the landlord several times between 22 July 2021 and 26 August 2021, asking for updates and that it copy her in on all communications to solicitors to “aid transparency”. There is no evidence that the landlord responded until 26 August 2021, when it said the ‘undertaking’ (a written agreement from the resident’s ex-partner) was missing.

6.     The resident sent the undertaking on 1 September 2021 and said to the landlord: “I have been continuously chasing this matter only to be told that I need to fill out more forms. If there are any more forms, please clarify […] When can we get this sorted out? My mortgage offer will expire in a few months”.

7.     On 7 September 2021, the resident complained to the landlord about its communications and the time it was taking to process the equity transfer. The landlord responded on 15 October 2021 and said it would process the remaining paperwork later that day and copy the resident into future emails with her solicitor.

8.     The landlord did not update the resident, and on 18 October 2021, she escalated her complaint to stage two due to “continuous failure to provide adequate customer service”. There was a delay in the landlord’s final response, which it sent on 4 January 2022, and offered the resident compensation of £200 for the delays in the process as a recognition that its communications could have been better.

9.     The resident wrote to this Service on 6 January 2022 and explained that she is dissatisfied with the outcome of the complaint, as she feels that the compensation offered does not reflect the distress and inconvenience caused.

10. The landlord wrote to the resident on 20 January 2022 and offered a full refund of its legal fee, which equated to £670 in compensation, which the resident accepted.

Scope of the investigation

11. The Ombudsman notes the resident’s assertion that the landlord’s delay in progressing the equity transfer has negatively impacted her mental health. While the Ombudsman is sorry to hear this, it is beyond the expertise of this Service to reasonably determine a causal link between the landlord’s actions (or lack thereof) and the impact on the resident’s health and well-being.

12. Often, when there is a dispute over whether someone has been injured or a health condition has been made worse, the courts rely on expert evidence in the form of a medico-legal report. This will give an expert opinion of the cause of any injury or deterioration of a condition. Without that evidence, this Service cannot draw any conclusions on whether the resident’s health has been affected by how the landlord handled the equity transfer process. This question may be better for the courts to decide where an expert can be cross-examined during a live hearing.

13. Should the resident wish to pursue this matter, she may want to seek legal advice. Nonetheless, the Ombudsman has considered the general distress and inconvenience the situation may have caused the resident.

Policies and procedures

14. The landlord’s internal complaint procedure consists of two stages. In both stages, the landlord aims to respond within ten working days.

15. The landlord’s compensation policy says that “where inconvenience has been caused because of our actions or inaction, we may award compensation of up to £150. The level of compensation awarded is at the discretion of the member of staff offering the compensation. In exceptional circumstances, an appropriate manager may offer a higher payment”.

Assessment and findings

16. When investigating a complaint, the Ombudsman applies its Dispute Resolution Principles, which include treating people fairly, following fair processes, putting things right and learning from the outcomes.

17. The Ombudsman’s expectation is that when a landlord receives a request to explain a process, it will respond promptly with a clear and detailed explanation of each step involved, provide a list of the required documentation, its fees, and charges, and specify the time anticipated for completion.

18. In this instance, the landlord has largely fulfilled these expectations. According to the records, on 9 March 2021, the resident’s ex-partner wrote to the landlord asking it to explain the process of transferring equity for shared owners. The landlord replied to both parties on 18 March 2021 and set out the process as follows:

  1. explanation of the background circumstances for the transfer
  2. the resident would need to instruct a solicitor to act on her behalf
  3. undertaking/agreement from the person to be removed
  4. consent from the lender
  5. court order stating the amount paid for the equity under the agreement
  6. financial assessment of the person remaining on the lease
  7. an administration fee of £50 was payable by cheque.

19. It said that once the landlord received all the paperwork, the resident’s solicitor would send the TR1 transfer form. The landlord would then give its consent.

20. In addition, shared-ownership leaseholders would also need a Licence to Assign – at an additional cost. The landlord would then instruct its solicitor to issue the licence to assign.

21. It is unclear whether the resident received this letter. Her emails from July and August 2021 to the landlord asking about progress suggest she may not have. There is no evidence that the landlord responded to the resident’s emails between 22 July 2021 and 26 August 2021. It would have been appropriate for the landlord to respond, answer the resident’s queries, explain the delay, and specify what it needed to progress the application.

22. The landlord explained in the letter that once it received all the paperwork from the resident’s legal team, it would review the case – the resident requested the landlord to provide an update on 8, 13 and 24 August 2021. The landlord responded on 26 August 2021 and said it needed another document, which the resident and her solicitor sent on 1 September 2021. The evidence shows this was the last remaining document the landlord requested in its Transfer of Equity Pack.

23. While it is the case that the landlord could only process the matter once it received the required information, had it responded to the resident’s emails appropriately, she would have had the opportunity to provide this sooner. It should have been more responsive and replied to all emails promptly, particularly bearing in mind the stressful nature of the circumstances surrounding the resident’s application to transfer equity.

24. On 13 September 2021, the landlord emailed the resident and said it did not have a copy of the mortgage offer, whereas the resident had already sent it on 11 July 2021, and the landlord confirmed it was received on 22 July 2021.

25. The landlord then said there were further fees which it had not mentioned in its initial letter. The process started on 11 July 2021, but only on 13 September 2021 did the landlord mention these additional fees. On 13 September 2021, it said it needed £100 for its consent for the mortgage. On 5 October 2021, it said there was a fee of £100 to issue its consent to change the land registry title.

26. On 15 October 2021, it said there was a further fee of £420 for a Licence to Assign. The fee of the Licence to Assign had been mentioned in the landlord’s letter. This further demonstrates why the landlord should have referred to it at the start of the process and ensured the resident had a copy. Had the landlord done so, some aggravating factors that led to the complaint may have been avoided.

27. In an internal email on 24 September 2021, the landlord explained the delay as follows: “We acknowledge and apologise for any delays caused by us in the process… owing to pressure of workload… and in part, the customer’s failure to disclose certain information… the crucial document that was holding up the process was received on 15 September 2021 … the paperwork has been duly issued and is now in the hands of the respective solicitors”.

28. The resident wrote to the landlord on 20 October 2021 setting out the adverse effect that the matter had caused her: “The delay, lack of response and unsatisfactory service received, has caused my mental health to deteriorate [and] I had to put my own therapy aside as I could not cope or focus on it because of the stress, anxiety and anger this process has caused me, also considering my mental health condition, I have a diagnosis of emotionally unstable personality disorder (EUPD), where emotions are heightened for me. Which has been exasperated by the landlord’s lack of care”. While the Ombudsman cannot determine that the landlord’s failings led to the resident’s mental health deterioration, they would have caused the resident additional stress, and time and trouble pursuing the matter at an already difficult time.

29. In its final response to the complaint, the landlord recognised that the resident’s complaint was about:

  1. Failure to respond to emails.
  2. That it did not copy the resident into emails to her solicitor.
  3. She had to resend documents that she had already submitted.
  4. It had not completed the transfer within the agreed timeframe.

30. Its somewhat brief response did not dispute this. The landlord apologised to the resident that she was left out of the communication with her solicitor and for the stress the delays caused. It also said: “The lack of communication is something [we] need to improve upon, and all parties should have managed customers’ expectations and amended their Service Level Agreements…”

31. In this case, the landlord acknowledged within its complaint responses that there were failings in its handling of the resident’s transfer of equity application. As such, the landlord was obliged to take action to ‘put things right’ for the resident in line with the Dispute Resolution Principles: The landlord did so by acknowledging and apologising for its failings. The apology was appropriate because it demonstrated that the landlord accepted responsibility for the service failure and acknowledged the impact on the resident. Further, on 4 January 2022, the landlord offered the resident compensation of £200 for its delay in progressing the equity transfer and handling the associated complaint. The resident declined, and the landlord revised its offer on 20 January 2022 to include a full refund of its legal fee and offered £670 in compensation, which was significantly above the level suggested in its compensation policy and above the Ombudsman’s guidance for remedies.

32. As part of its complaint responses, the landlord confirmed it had identified learning that it would take forward. It said the member of the Homeownership team that had dealt with the resident’s case would be monitored by their line manager for the next few months “to see if there are any areas for improvement and why they were unable to achieve the expected deadlines”. In the Ombudsman’s opinion, it was appropriate that the landlord explained that the complaint had identified learning as effective and positive complaint handling provides the opportunity to improve a landlord’s service delivery.

33. Overall, the landlord has taken appropriate steps to acknowledge and apologise for the shortcomings in its communication and offered appropriate compensation. The landlord’s apology and its offer of compensation are appropriate redress to resolve the complaint.

Complaint handling

34. There were failings in the landlord’s complaint handling:

  1. The resident made a first-stage complaint on 7 September 2021 via the landlord’s web portal. The Service had not received a copy of the resident’s official complaint. It is unclear whether the landlord has a copy.
  2. An acknowledgement should have been sent within 48 hours, but the landlord sent its acknowledgement 23 working days later, on 29 September 2021.
  3. Against a target response of 10 working days, the landlord’s first stage response took 39 working days.
  4. The stage two response was late by 67 working days.
  5. It failed to explain why it had lost the resident’s mortgage offer and the background circumstances.

35. The landlord did not refer to these failings in its final response to the resident or offer any remedy for the frustration and inconvenience this would have caused. However, the delay did not impact the outcome of the complaint, and the £670 compensation offered was significantly more than either the landlord’s compensation guidance or the Ombudsman’s remedies guidance would suggest. Therefore, the compensation the landlord offered suitably remedied the impact of the complaint-handling failure on the resident.

36. Recommendations are made below to ensure that the landlord ‘learns from outcomes’ in relation to the complaint handling.

Determination

37. In accordance with paragraph 53 (b), the landlord has offered redress to the resident prior to the investigation, which, in the Ombudsman’s opinion, resolves the complaint about the landlord’s handling of the resident’s transfer of equity application satisfactorily.

38. In accordance with paragraph 53 (b), the landlord has offered redress to the resident prior to the investigation, which, in the Ombudsman’s opinion, resolves the complaint about the landlord’s handling of the formal complaint satisfactorily.

Orders and recommendations

Recommendation

39. The landlord should clarify its fees, including the charges for its letters of consent.

40. The landlord should review its complaint handling to ensure that complaints received via its web portal are acknowledged on time according to its policy and in line with the Housing Ombudsman’s Complaint Handling Code and that it retains a copy of the complaint.

41. The landlord should review its complaint handling to ensure that all complaints are responded to on time according to its policy and in line with the Housing Ombudsman’s Complaint Handling Code. It should ensure its responses address the concerns raised, and that it explains its findings in full.

42. The landlord should review its record-keeping to ensure it identifies the reason it had lost the documents and put measures in place to prevent instances such as this from reoccurring.