LiveWest Homes Limited (202010096)

REPORT

COMPLAINT 202010096

LiveWest Homes Limited

31 March 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

The Complaint is about the landlord’s response to resident’s reports about:
1. The administration of the rent account at the property.
2. The landlord’s handling of the resident’s requests to staircase the property.
3. The landlord’s complaint handling.
4. The amount of overcharged rent and the interest offered by the landlord.

Jurisdiction

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.
After carefully considering all the evidence, in accordance with paragraph 39(g) of the Housing Ombudsman Scheme, the complaint about the amount of overcharged rent and the interest offered by the landlord is outside of the Ombudsman’s jurisdiction.
Paragraph 39(g) of the Scheme states that the Ombudsman will not investigate complaints which, in his opinion:

Concern the level of rent or service charge of the amount of the rent or service charge increase.

The resident stated that she remained dissatisfied with the amount of overcharged rent and the interest offered by the landlord. Consideration of the amount of overpaid rent and interest offered are issues appropriately dealt with by the First Tier Tribunal (Property Chamber). The tribunal is able to scrutinise the landlord’s calculations and distribution method of costs, it can also consider whether costs are reasonable and will also be able to look at the consultation process followed by the landlord, including the formal correspondence sent to the resident as part of this process.
The resident has also confirmed that she was dissatisfied with the landlord’s communication in relation to the amount of overcharged rent and the interest offered by the landlord. This issue is within the Ombudsman’s jurisdiction and has been considered below.

Background

The resident has been a shared ownership leaseholder at the property since 1990, the landlord is a registered social landlord. The resident is required to pay a percentage rent at the property and is subject to the covenants under the leasehold agreement.
The landlord’s complaints policy states that it ‘will aim to return the customer to the position they would have been in if there was no service failure. If it cannot do this or if its delay had caused difficultly for the customer then it will consider financial compensation in line with its compensation guidance’.
The landlord operates a two-stage complaints policy. The policy requires that complainants are kept updated throughout the complaints process. If the resident makes a complaint at the first stage, the landlord will aim to formally respond within 5 working days. The landlord recognised that some complaints may require detailed investigations, where this is the case it would discuss this with the resident and agree on the timescale in which it would respond. If the resident is dissatisfied with the response, the resident can request a formal review of the decision and the timescales to respond will be agreed directly between the manager and the customer but will normally be no more than 7 days.
Under the landlord’s complaint policy in most cases it will ‘quickly be able to resolve customer concerns; in cases where it is not able to do this it will treat the issue as a complaint’.
The landlord’s compensation policy states that ‘consideration should be given to applying a remedy where a service failure was found to have had an adverse impact on the complainant’. The policy provides for compensation in the form of financial redress which can include ‘compensation, refund or a goodwill gesture’. Under the policy when the resident had a valid reason to complain but had not suffered significant service failure or inconvenience a £25 goodwill gesture can be offered. If the resident had a good reason to complain and had suffered a moderate level of inconvenience due to the service failure or the length of time taken to resolve it, the landlord can offer a maximum £200 goodwill payment.

Summary of events

On 11 January 2020, the landlord responded to a request from the resident to increase their ownership share at the property. It advised that there were no discounts applied to the value when the resident bought more shares.
On 11 January 2020, the resident responded and asked if the landlord had even looked at her lease. She highlighted that under her lease agreement she was entitled to a discount on the first 50% of the staircasing.
On17 January 2020, the landlord advised that the discount would only apply in the case of Right to Buy, which shared ownership properties are subject to, and it had checked this position with its solicitors. It advised that the resident was free to seek independent legal advice.
The resident responded on the same day and expressed ‘her disappointment that the information she had received from the landlord was inaccurate and that she expected a better level of service’.
On 27 January 2020, the landlord contacted the resident and stated that ‘she was correct, and it should check leases before giving advice’. It advised that the resident was entitled receive a 60% discount on an additional 25% share. It highlighted that ‘if the resident was to staircase by an additional 25%, this would take her to 50% ownership in total’. It advised that the other 50% would not be discounted as per the lease agreement. It stated in order to establish the price, the property would need to be valued by a chartered surveyor. It highlighted that the resident’s lease sets out that she ‘must contribute £50 to this valuation, on receipt of which, and the completed forms, it would arrange for a chartered surveyor to attend her property’.
On 28 January 2020, the resident asked if the 1% discount per year of residence continued beyond 30 years or if there was a maximum figure. The landlord responded and stated that ‘its solicitor had confirmed that the maximum percentage for a house is 60%. The discount is 35% plus 1% for each complete year by which the qualifying period exceeds five years up to a maximum of 60%’.
On 30 January 2020, the landlord contacted the resident and stated that the information the solicitor gave was incorrect and offered its apologies. It advised that ‘if the if the resident held off acquiring the additional shares at this stage, she would be entitled to an additional 1% for every further full year of ownership up to a maximum of 70%’.
In January 2020, it was discovered that the resident had been overpaying rent at the property since at least 1998. It is not disputed that there was £13545.94 owed to the resident at that time in respect to overcharged rent.
On 6 March 2020, the landlord contacted the resident and apologised for the delay in providing a response to her complaint about the rent account in January 2021. It stated that its head of Income Services was doing some further investigation and would provide a response by next week.
On 12 March 2020, the resident contacted the landlord and asked for an update in regard to the situation as it had taken over 6 weeks. The landlord responded the next day and advised that ‘it was taking longer than anticipated’ due to the complex calculations. It advised it would get back to the resident as soon as possible. No information was provided to this service on the exact date in which this information was supplied to the resident, however the landlord made an offer to repay the £13,545.94 plus interest of 2%.
On 14 September 2020, the resident made a complaint to the landlord regarding the amount of overpaid rent and the interest offered by the landlord. In the complaint the resident raised that she would like the complaint escalated to stage two of the landlord’s complaints process. The resident asked for the following issues and outcomes:
1. That the landlord reviewed the overpayment calculations and provided a written explanation on how it achieved the amount and that it acknowledged the 8% statutory interest levied for the payment of debt.
2. That the landlord refunds the £50 surveyor fee.
3. That the landlord to offer a no-fee staircasing to 50% based on a valuation by the resident’s nominated surveyor and include their 65% discount.
On 22 September 2020, the landlord contacted the resident to clarify the status of the complaint. It highlighted that it was yet to receive a stage one complaint from the resident and therefore would treat this as a stage one complaint. It stated that it would provide a response to the resident by 29 September 2020 and if the resident was still dissatisfied it could escalate the matter.
On 29 September 2020, the landlord contacted the resident and advised that it needed to seek legal advice in order to fully respond to the resident’s claims. It highlighted that it would provide a response as soon as possible.
On 7 October 2020, the resident wrote to the landlord and asked if there was an update on her stage one complaint.
On 8 October 2020, the landlord issued the resident with its stage one response. It addressed the following issues:
1. It acknowledged the overpayment of rent by the resident of £13,545.94 between 1998 to 2020. It offered to repay the sum plus £3,545.94 which represented 2% interest on the overall payments, for a total of £17,216.25 to be paid within 5 days.
2. It stated that it believed that the 2% interest rate was ‘fair and represents awards made by courts in relation to interest’.
3. It apologised for the ‘inconvenience and stress’ caused by the undetected overpayments and offered the resident £100 as a goodwill gesture.
4. In regard to the resident’s application to staircase, it advised ‘that the resident would receive a discount of 60% (35% plus 1% for every extra year of the tenancy after the first 5 years) the additional 25% share would be £19,000’. It stated that if the resident wanted to staircase to 100% the purchase price for the additional 75% share would be £114,000, as the discount only applied to the 25% share that took the resident up to 50% ownership and that no discount was available for staircasing over 50%.
5. It highlighted that the valuer used had ‘significant experience in shard ownership valuations and trusted their opinion’. However, it agreed to refund the £50 for the further valuation carried out.
6. It highlighted that this was its final response, and that the decision would not change. It highlighted that the resident could now contact the Ombudsman directly.
On 14 October 2020, the resident contacted this service and made a complaint regarding the landlord’s response and gave a detailed summary of the complaint and events that had taken place.
On 9 December 2020, this service contacted the landlord and asked that it issue the resident with a stage two response within 20 days.
On 18 December 2020, the landlord issued the resident with its stage two final response. It highlighted that its position stated in its stage one response on 8 October 2020 was final and it was satisfied that it had exhausted all options available to resolve this situation.
This service contacted the resident and she stated that she is yet to make a decision in regard to the advancement of the staircasing at the property.

Assessment and findings

The administration of the rent account at the property.

Evidence provided by the resident demonstrates that the landlord was made aware of the potential rent overpayment in January 2020, both parties had failed to recognise the rent implication up until that point. When the landlord become aware of the rent overpayment it took a resolution focused approach and investigated the matter however there was several delays in providing the resident with the figures of overpayment from January to March 2020 as highlighted in paragraph 20 and 21 above.
The landlord subsequently offered to refund the resident £13,545.94 in over paid rent plus £3,545.94 interest for a total of £17,216.25. In the landlord’s stage one response it offered the resident a further £100 goodwill payment for the ‘inconvenience and stress’ caused by the undetected overpayments. Under the landlord’s compensation policy, it is able to offer financial redress including a goodwill gesture up to £200, it would have been appropriate in this circumstance to offer the resident the full amount of compensation for the acknowledged service failure in order to put right this part of the complaint inline with its policies and procedures.

The landlord’s handling of the resident’s requests to staircase the property.

This service is unable to make a decision in regard to the disputed valuation used for the proposed staircasing at the property however it is able to assess how the landlord handled the application. The resident first raised her interest in staircasing on the 11 January 2020, the landlord issued incorrect information to the resident in regard to the application on three separate occasions as highlighted in paragraph 12 to 18 above. The resident expressed her ‘disappointment’ in the level of service that she received from the landlord and the 8 month delay in getting accurate figures regarding the staircasing. In response, the landlord appropriately acknowledged that there had been a number of service delivery failures including the quality of response and the resident having to chase up replies. The landlord also appropriately apologised for these failures, took a resolution focused approach and agreed to provide training to staff around this particular lease types.
However, the landlord failed to offer the resident compensation for these acknowledged failures in line with its compensation policy. The landlord’s compensation policy allows for a goodwill gesture as demonstrated above in paragraph 31. The evidence demonstrates that the resident received incorrect information on a number of occasions which was an approprate reason for a complaint to be made as it potentially caused further delay in resolution of the matter. It is clear from the evidence provided by the resident that this experience had damaged her relationship with the landlord and is no longer sure if she wants to staircase the property. Overall, the landlord should have offered a goodwill gesture to the resident in order to put right the distress and inconvenience experienced inline with its compensation policy.
The resident stated that she is yet to make a decision in regard to the advancement of the staircasing at the property. The reason this service has not investigated the value and detail of the offer is that it would have to be reassessed as it is outside of the six-week time period and figures would likely change. If the resident was unhappy with the value of the property once reassessed the issue can be raised with the District valuer as per the lease agreement or a new complaint to this service.

The landlord’s complaint handling.

The landlord operates a two-stage complaints policy, if the resident made a complaint at the first stage the landlord should formally respond within 5 working days. The documentation provided shows the initial inquiry in regard to the staircasing at the property by the resident on 11 January 2020. Under the landlord’s complaints policy in cases where it is not able to quickly resolve customers concerns it should treat the issues as a complaint. The landlord failed to escalate the resident’s concerns into its formal complaint’s procedure causing a delay in the resolution of the matter. The landlord’s response at this point was not inline with its complaints policy.
During the investigation of the staircasing issue it became apparent that there were also issues with the overpayment of the resident’s rent account. The resident raised the issue with the landlord in January 2020 and as above the landlord failed to escalate the resident’s concerns into its formal complaint’s procedure. The landlord’s failure caused delay in the resident receiving the requested information until March 2020, however due to the complexity of the complaint and the landlord somewhat keeping the resident informed it was only a minor failure.
On 14 September 2020, the resident attempted to escalate the issues to stage two of the landlord’s complaints process. The landlord advised that they were yet to receive a formal complaint and therefore would treat this as such. The landlord provided a stage one response to the resident on 8 October 2020, this represents a 13-day delay in providing its stage one response however it communicated with the resident about the delay and due to the complexity of the matter this was only a minor failure.
This service then contacted the landlord on 9 December 2020 and asked them to issue a stage two response within 20 days. The landlord issued the resident with its final stage two response on 18 December 2020. The landlord’s failure to treat the resident’s initial inquiries as complaints lead to a delay in the potential resolution of the matter. The landlord did not act in accordance with its complaints policy in regard to the escalation of the complaint or in only providing a stage one response. The landlord did not take a resolution focused approach and failed to offer any compensation for the distress or inconvenience caused to the resident.

Determination (decision)

In accordance with paragraph 54 of the Housing Ombudsman Scheme there was service failure in respect of:
1. The administration of the rent account at the property.
2. The landlord’s handling of the resident’s requests to staircase the property.
3. The landlord’s complaints handling.

Reasons

The landlord failed to adequately respond to the resident’s complaint about the administration of the rent account at the property. There were a number of delays in provided figures and correspondence to the resident during its investigation. The landlord appropriately offered the resident compensation however the amount failed to put right the distress and inconvenience experienced by the resident.
There were acknowledged service delivery failures by the landlord in regard to the quality of its response to the resident’s request to staircase and the resident having to chase up replies. The landlord appropriately offered an apology and advised it would provide staff training. The landlord however failed to provide compensation to the resident for its failures in line with its compensation policy.
The complaints handling by the landlord was not in line with its complaints policy at stage one or two of the process. The landlord failed to escalate the resident’s initial complaints and only issued the resident with a stage one formal response. The landlord failed to adequately compensate the resident for these failures.

Orders

The Ombudsman orders the landlord to pay the resident compensation of £400 compromising:
1. £200 in respect of the distress and inconvenience experienced by the resident in relation to the administration of the rent account at the property.
2. £100 in respect of the distress and inconvenience experienced by the resident in relation to the landlord’s handling of the resident’s requests to staircase the property.
3. £100 in respect of the distress and inconvenience caused by the landlord’s complaint handling.
This amount replaces the £100 compensation previously offered by the landlord.
The landlord is to make this payment to the resident within four weeks and to update this service when payment has been made.

Recommendations

The landlord is to take steps to ensure that this issue is not currently affecting other properties under the same lease type.
The landlord to refund the £50 for the further valuation carried out if it had not already done so.