London & Quadrant Housing Trust (L&Q) (202107935)

REPORT

COMPLAINT 202107935

London & Quadrant Housing Trust

31 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 time taken to complete the sale of the resident’s property.

Background

2. The resident occupied a flat in a block as a shared owner leaseholder; the lease began on 29 September 2017. The property is a two-bedroom, third floor flat.
3. The resident began to sell her 30% share of the property in March 2021. The initial buyers withdrew from the sale on 24 June 2021 and a new buyer was allocated by the landlord on 1 July 2021. The resident completed her sale to the new buyer on 23 September 2021.
4. The resident raised concerns that her sale was mismanaged by the landlord. In addition, the resident believed that the surveyor, selected by the landlord from its panel, overvalued her property. The lender to the initial buyers valued the property at a price lower than the panel surveyor had, as did a second lender subsequently; this caused the buyers to withdraw. The resident believes that the landlord’s actions resulted in her missing the stamp duty holiday for properties up to £500,000 that ended in June 2021, thereby incurring additional financial costs and made a complaint about the landlord’s handling of the sale on 20 January 2022.
5. The landlord issued its stage one response on 31 January 2022. It said:
   1. the resident had the option to instruct a Royal Institute of Chartered Surveyors (RICS) registered surveyor of her choice. If the resident was not happy with the valuation provided by the surveyor selected by the landlord from its panel, she should have discussed this with the surveyor at the time.
   2. the initial buyers withdrew from the sale on 25 June 2021.
   3. the resident completed the property sale on 23 September 2021; the stamp duty tax holiday for properties up to £250,000 that had commenced on 1 July 2021 (following the ending of the stamp duty holiday for properties up to £500,000 on 30 June 2021) ended on 30 September 2021.
   4. the landlord said its solicitors had actively worked on the sale and said it was unable to offer compensation as the sale had proceeded in good time with no significant delays.
6. Dissatisfied with this response, the resident escalated her complaint on 2 February 2022. The landlord issued its stage two response on 18 February 2022. It said:
   1. the initial buyers withdrew after trying to proceed with two different lenders and there were no significant delays caused by the resales team.
   2. it phoned the initial buyers on 24 June 2021 and received definite confirmation that they no longer wished to proceed and the same day it updated the resident and on 1 July 2021 the property was allocated to the new buyer.
   3. the marketing fee had been reduced previously and the landlord could not reduce it again.
   4. the sale of the property was completed on 23 September 2021 and since the stamp duty holiday in respect of properties up to £250,000 ended on 30 September 2021, this stamp duty holiday was not missed.

7. The resident informed this Service that she wishes the landlord to pay financial compensation in order to resolve her complaint. The resident wishes the landlord to:

a.     refund the cost of the first valuation by the surveyor from the landlord’s panel.

b.     refund its marketing fee.

c.      compensate for the additional stamp duty paid.

d.      compensate for the valuation that the resident herself had commissioned.

Assessment and findings

Scope of investigation

8. The Ombudsman notes the resident’s comments about the process of the sale to the new (successful) buyer but it is the case that the landlord’s actions in relation to the sale to the new buyer are not relevant to the resolution sought by the resident. This Service will look at the whole sales period, but, because the successful buyer completed the sale in less than three months, this report will therefore primarily focus on the landlord’s action in the period when the initial buyers were attempting to purchase the property. This timeframe is between March 2021 and June 2021.

Homeownership standard operating procedure

9. The landlord’s homeownership standard operating procedure sets out how it helps homeowners with their specific needs. With regard to resales, the landlord has up to eight weeks to find a buyer registered with itself otherwise the property will be listed by an outside estate agent. This eight week nomination period can be waived by landlord if it wishes to do so.

Time taken to complete the sale of the resident’s property

10. In this case, the role of the Housing Ombudsman is to consider the landlord’s handling of the sale of the resident’s property and whether its actions caused significant delays that caused detriment to the resident. The Ombudsman also considers whether the landlord’s response was in line with its own policies and good practice and whether its responses were fair, appropriate, reasonable and proportionate in the circumstances of the case.
11. The landlord utilised the nomination period and therefore, after obtaining details of the property and having it valued by a panel surveyor, published the property online. It found a buyer during the nomination period. Thereafter, although the landlord’s role was to co-ordinate the sale, it was unable to control the timescales in which buyers/brokers/lenders/solicitors provided information to each other and/or the landlord, other than chasing for a response when the landlord itself required one and requiring its own solicitor to minimise delays.
12. From the evidence the Ombudsman has seen, the initial buyers were offered the property on 19 April 2021, which was less than three weeks after the property was first marketed on 30 March 2021. This was considerably less than the eight weeks nomination period. The landlord was made aware on 18 May 2021 that the lender to the initial buyers had valued the property at a price lower than the valuation of the panel surveyor. The landlord was subsequently made aware that the initial buyers had obtained another lender, and later learned that the new lender had also valued the property, on 14 June 2021, at a price lower than the valuation of the panel surveyor.
13. As the initial buyers did not seek the return of their reservation fee, the landlord could not have been sure that the initial buyers wished to withdraw from the sale on account of the lower valuations, and it was only when the landlord telephoned the initial buyers on 24 June 2021 that it was able to confirm at this. The landlord advised the resident of this fact the same day. The Ombudsman does not consider that the landlord was responsible for any delays that arose during the period 19 April 2021 to 24 June 2021.
14. The property was re-advertised and on 1 July 2021 the landlord allocated the property to the new (successful) buyer as first come first served. The resident raised concerns about this new buyer as they had a property to sell also and had not had a memorandum of sale yet. The landlord apologised for this allocation, stated the new buyer was keen to proceed and stressed it was doing all it could to urgently progress the sale. The sale progressed with completion on 23 September 2021. This was prior to the stamp duty tax holiday (for properties up to £250,000) ending on 30 September 2021.
15. After the new buyer’s financial interview was conducted in early July 2021, the landlord stated sale was in the hands of the resident’s and new buyer’s solicitors. As mentioned above, the landlord was unable to control the timescales in which buyers/lenders/solicitors/managing agent provided and relayed information. From the evidence this Service has seen, between July and September 2021, the landlord kept parties informed throughout, chased parties where necessary and co-ordinated the sale appropriately. As such, the Ombudsman does not find any failing in the landlord’s actions with respect to the time taken to complete the sale of the resident’s property.

Marketing fee

16. The Ombudsman notes the landlord approved the initial buyers as their eligibility for shared ownership was met and they successfully completed the financial interview. Prior to publishing the property online, a letter to resident dated 24 March 2021 set out that the landlord will take every reasonable step to ensure the eligibility of a nominated buyer and that it cannot be held liable for any nominated buyer who fails to complete the purchase of a home or for any costs involved. The landlord found a buyer within its stipulated timeframe and as the initial buyer withdrew from the sale, this Service cannot see that the marketing fee should be refunded.

Stamp duty land tax

17. The new buyer was allocated on 1 July 2021 and the completion of the sale took place on 23 September 2021, which was a period of less than three months. Looking at the sale of the property from when it was first marketed online to when the completion of the sale took place, the period was from 30 March 2021 to 23 September 2021, approximately six months. The Ombudsman appreciates that the sale of a property can be a lengthy process and so has not considered this length of time to be indicative of any failures or delay in process simply on the face of it.
18. Given that the initial buyer had withdrawn from the sale after three months, this timeframe was not extensive. The Ombudsman also would not have expected the landlord to have prioritised or accelerated its usual process on the basis that the resident sought to benefit from the stamp duty holiday. While it would have been favourable for the landlord to have done so, there was no obligation to accommodate the resident’s external opportunities. It is therefore difficult to conclude that the landlord was liable to compensate the resident for any additional stamp duty paid. It is fortunate, as the landlord highlighted, that the sale was completed before the second stamp duty holiday, albeit with less benefit.
19. While the resident sought to complete the sale of her property prior to 30 June 2021, the initial buyers only sought a return of their reservation fee on 24 June 2021. It was not unreasonable that the landlord did not source a new buyer and complete the sale within the space of a week. This Service is of the opinion, therefore, that compensation is not due.

Surveyors’ fees

20. It is the case that professional opinions vary, so different surveyors may well arrive at different valuations of the same property, even when the valuations are being made for the same purpose.  Further, when valuations are made for different purposes, they are likely to fluctuate.
21. In this case, the Ombudsman recognises that the resident did not raise any concern with the panel surveyor’s initial valuation in February 2021 and if she disagreed, has a right to acquire her own valuation. In addition, the initial valuation was valid until 24 May 2021 and was extended until 23 July 2021 as the surveyor stood by their valuation (valuations are typically valid for three months). A difference in valuations is not grounds for a refund and the Ombudsman therefore does not consider it appropriate for a refund to be made to the resident by the landlord in respect of the fee charged by the panel surveyor.
22. Moreover, the resident chose to commission a valuation from a RICS surveyor on 23 June 2021, which resulted in a valuation lower than that of the panel surveyor.  As noted above, the surveyor stood by their initial valuation and the resident had been made aware of this. It was the resident’s own choice to commission an additional valuation and therefore it falls to the resident to pay for the survey. It would be unfair for this Service to require the landlord to reimburse the resident for this additional fee.

Determination

23. In accordance with paragraph 52 of the Housing Ombudsman Scheme, there was no maladministration in the time taken to complete the sale of the resident’s property.