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One Housing Group Limited (202000092)

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REPORT

COMPLAINT 202000092

One Housing Group

16 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 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 response to the resident’s request for information about the cladding on the building she resides in, to enable her to complete the sale of her shared-ownership home.

Background and summary of events

Background

  1. The resident holds a shared-ownership lease of the property which the complaint concerns. The property is a two-bedroom flat situated on the second floor of a purpose-built building with six floors. The freehold of the building is owned by the landlord.
  2. The Government initiated its Building Safety Programme after the fire at Grenfell Tower. A series of advice notes were issued by the Government as part of this.  Advice Note 14 was issued in December 2018. It was for owners of high-rise residential buildings (18m or above to the height of the top occupied storey) where the external wall system of the building did not incorporate aluminium composite material (ACM). The advice sets out checks which owners can carry out to satisfy themselves, and their residents, that their building is safe. The process to obtain certification can be complicated and require input from experts, which there is currently a shortage of within the industry.
  3. Government guidance on building safety was consolidated in ‘Building Safety Advice for Building Owners’, issued in January 2020. This confirms that the guidance applies to all multi-occupied residential buildings under 18m. Paragraph 1.4 of this guidance states: “For the avoidance of doubt, building owners should follow the steps in this advice as soon as possible to ensure the safety of residents and not await further advice or information to act”.
  4. In response to the guidance some lenders took the view that, if certification could not be provided to demonstrate compliance with the Government’s guidance on fire safety, they would be unwilling to offer a mortgage on properties within these buildings as they would have a value of £0.
  5. In January 2020 The Royal Institution of Chartered Surveyors (RICS), The Building Societies Association, and UK Finance agreed a new industry-wide valuation process to help people buy and sell homes and re-mortgage in buildings above 18m. Form EWS1 was introduced to prove to lenders that external cladding had been assessed by an expert.

Summary of events

  1. The resident says that she started the process to sell the property during December 2019. She says that five prospective buyers have been interested in the property but have been unable to obtain information about the cladding on the building, and therefore have been unable to obtain a mortgage.
  2. On 20 April 2020 the landlord wrote to the resident about the cladding issue. This was prompted by a complaint from the resident, a copy of which has not been provided to the Ombudsman. In its response the landlord said that:

a.     It was not a requirement to supply an EWS1 form however it was finding that it was receiving multiple requests for this from multiple lenders no matter how tall the building was.

b.     Due to the number of tall buildings it owned, it had prioritised its buildings based on the Government guidance. Therefore, buildings over 18m and with ACM cladding had been prioritised.

c.      It was unable to pay compensation for any costs the resident incurred because she was waiting for confirmation of compliance with the Government guidance. This was because the issue arose when lenders linked their lending decisions to Government advice notes, a situation that was outside its direct control.

d.     It had not yet instructed an intrusive survey on the building to be carried out as the building was less than 18m and did not have ACM. The surveys could take anywhere between 12 and 20 weeks to undertake. It would provide a summary of the survey to all residents in the building.

e.     It was not in a position to buy back the property. It understood the resident had returned the documentation in order to sublet the property and the lettings team would be able to guide the resident through this process.

  1. Following this the landlord provided a further response to the resident in which it clarified that it was aiming to put together its cladding programme by the end of the summer. It said it would update the resident when it had further information.
  2. During May 2020 the resident raised concerns about the cost of remedial works being recharged to leaseholders. She queried how she could have been sold a property that passed regulations and why she was not made aware of the cladding issue sooner. She asked the landlord to treat the matter as an official complaint. Following this the resident provided the landlord with a quote from a RICS accredited surveying company whom she said was able to provide an EWS1 form.
  3. In response the landlord confirmed that the resident’s emails had been passed to the complaints team to respond to. The landlord subsequently provided a final response to the complaint on 15 May 2020 and in this it said that:

a.     The Government advice note issued in December 2018 applied to buildings over 18m. It had taken the advice on board and the steps it had taken included: ascertaining the materials on its buildings; checking documentation from the original developers; and conducting intrusive surveys.

b.     The sector had struggled to obtain suitably qualified fire experts to carry out the surveys. It had to prioritise the surveying of its buildings based on height, type of cladding used and the level of fire risk.

c.      The EWS1 form was introduced in December 2019 to ensure the recording of external wall construction in buildings over 18m in a consistent manner. The G15 (largest 15 housing associations) were working with the Government and lenders on the current issues with the form. Most qualified fire engineers would not sign the form due to their insurance not allowing them to do this.

d.     It would be bidding for cladding funding from the Government but it was not in a position to subsidise the costs for leaseholders as it was a charitable organisation.

e.     It was currently looking at putting together its cladding programme by the end of the summer. It had prioritised its buildings over 18m and those with ACM cladding, and it was now starting to look at all its other buildings based on recent guidance.

f.        When the property was developed it was signed off by building control. Due to the unfortunate tragedy of Grenfell Tower, the Government reviewed building regulations which changed and clarified the expectations for external wall systems. As these changes were outside of its control the resident’s complaint was not upheld.

g.     The resident was able to refer her complaint to the Ombudsman should she remain dissatisfied with its response.

  1. Following this the landlord sent out a letter to residents of the building. In this the landlord confirmed that it was currently putting together the next batch of surveys which had been delayed by the Coronavirus pandemic. It said that due to the current backlog it did not anticipate a report (EWS1 form) being available before November/December 2020. It also confirmed the materials used in the external wall system of the building (facing brick, HPL cladding and honeycomb solid metal cladding).
  2. During July 2020 the resident asked the landlord to provide a copy of the latest fire risk assessment for the building. The landlord subsequently provided a summary of this to the resident and clarified that from March 2021 it would be publishing all summaries on its website.
  3. During December 2020 the landlord updated the resident on the cladding survey. It said that the surveys had been delayed due to the Coronavirus pandemic and it did not anticipate the EWS1 form being completed before March 2021. It said it would update the resident once a date was confirmed for the survey to take place.
  4. The resident has told the Ombudsman that the landlord has approved her subletting application and the property is currently let to her prospective buyer. She says the prospective buyer is still interested in purchasing the property but they want to take advantage of the stamp duty holiday which ends in March 2021. She says that she needs to access the equity in the property and as a resolution to her complaint she is seeking the completed EWS1 form to enable her to sell the property.

Assessment and findings

  1. The Ombudsman’s guidance note on fire safety and cladding sets out that as the Government’s expectations about this matter are only currently detailed in guidance, there is an element of discretion for a landlord as to how and when it chooses to comply with it. The Ombudsman’s guidance further sets out that when investigating a complaint relating to fire safety and cladding the Ombudsman will consider the following points:
  1. What are the landlord’s long-term plans for compliance with the guidance and are these fair and reasonable?
  2. How has it communicated with residents regarding the situation and was this communication appropriate?
  3. How has it responded to the individual circumstances of the resident?
  1. At the time the resident started the process for selling the property, Advice Note 14 did not apply to the building as it only applied to buildings 18m or higher. The Government guidance was revised in January 2020 and since then it has applied to the building. This means that the landlord is expected to carry out checks to ensure that the cladding system is safe and to carry out any necessary remedial works. As the Government’s expectations in relation to cladding and fire safety are only detailed in guidance, there is an element of discretion for the landlord as to how and when it chooses to comply with it.  
  2. It is clear from the landlord’s correspondence with the resident, in addition to information published on its website, that the landlord is taking steps in order to comply with the Government’s guidance in respect of the building. This is because the landlord explained that it will be responding by inspecting its buildings and then completing any remedial work identified. In the Ombudsman’s opinion this is appropriate as, while the guidance is not a legal requirement, it has been established as best practice in relation to building safety.
  3. The landlord has also explained that it is taking a risk-based approach to prioritising its buildings for inspection considering height, cladding type and fire risk. The Ombudsman recognises that the process to achieve compliance with the Government guidance is complicated and requires input from experts, which there is currently a shortage of within the industry. Given this and the number of buildings owned by the landlord that require assessment, the Ombudsman is satisfied that the landlord’s approach to prioritising the inspections is rational.
  4. The landlord initially told the resident that it was working on putting together its programme for buildings under 18m by the end of the summer 2020. However, the landlord subsequently explained that the inspection of the building had been delayed due to the Coronavirus pandemic and it has more recently confirmed that the inspection is unlikely to take place before March 2021. It is understandable that these delays would be extremely frustrating for the resident but they were outside the landlord’s control.
  5. However, it is noted that the resident provided details of a surveying company that she said could carry out the inspection and provide an EWS1 form. The landlord did not address this issue in its complaint response and therefore it is unable to demonstrate that it gave due consideration to this proposal. This was a missed opportunity to explore a potential resolution to the lending issue which was holding up the property sale and was therefore a service failure.
  6. The Ombudsman acknowledges the difficult situation the resident is in with regards to progressing the property sale and that this is through no fault of her own. It is understood that the landlord has allowed the resident to sublet the property, which is usually only allowed in certain circumstances. Therefore, the landlord has taken reasonable steps to assist the resident and enable her to move out of the property. The landlord is under no obligation to buy back the property and therefore it was reasonable for it to confirm that it would not be doing so.
  7. However, the resident has explained that whilst she has sublet the property, she still needs to sell the property urgently as she needs to access the equity in the property. The Ombudsman cannot see that the landlord took into account the resident’s individual circumstances, including that it explored the resident’s reasons for selling the property, in considering the support and assistance it may be able to offer. This was unsatisfactory given the difficult situation the resident was in. Therefore, the Ombudsman considers it appropriate that the landlord explores whether there are any other actions it can take to assist the resident including that it considers whether reverse staircasing is something it is able to offer.
  8. Furthermore, the resident has told the Ombudsman that she paid a fee for the subletting application and understands that other social housing providers have waived this fee for leaseholders unable to sell their homes. The Ombudsman has asked the landlord to clarify if the subletting fees had been waived in this case. In response the landlord has said that it has spoken to the resident about the matter who has clarified that she was referring to the cost of the management pack. Therefore, it is unclear if the landlord has charged the resident a fee for the subletting application, and if so, it is recommended that it reimburses this fee.

Determination (decision)

  1. In accordance with paragraph 54 of the Housing Ombudsman Scheme there was service failure by the landlord in relation to its response to the resident’s request for information about the cladding on the building she resides in.

Reasons

  1. It is acknowledged that the resident’s situation is difficult and that she is in this position through no fault of her own. This is because until the landlord is able to provide certification in line with the Government’s guidance, the resident is effectively in limbo as she is unable to sell the property as lenders will not lend on it because of the potential cladding issue.  
  2. The Ombudsman is satisfied that the landlord is taking appropriate steps in response to the Government’s guidance, as it has committed to inspecting the building and providing confirmation of compliance. The Ombudsman is also satisfied that the landlord’s approach to prioritising the inspections is rational and that it has adequately explained why it will not be arranging the inspection immediately.
  3. However, the landlord has not been able to demonstrate that it gave due consideration to the resident’s proposal that it commission an inspection from a surveying company that she provided details of. This was a missed opportunity to explore a potential resolution to the lending issue which was holding up the property sale and was therefore a service failure.

 

 

Orders and Recommendations

Orders

  1. The landlord is ordered to do the following within four weeks of the date of this report:

a.     apologise to the resident in writing for the service failure identified by this investigation.

b.     pay the resident £200 compensation for the distress and inconvenience caused by its handling of the resident’s proposal that it commission an inspection from a surveying company.

c.      consider whether there are any other actions it can take to assist the resident; this should include consideration of the resident’s quote for an inspection and its position on reverse staircasing in exceptional circumstances. The landlord should provide confirmation of the outcome in writing to the resident and the Ombudsman.

Recommendations

  1. It is recommended that the landlord does the following within four weeks of the date of this report:

a.     provides an update to the resident on the likely timescale for obtaining confirmation of compliance/EWS1 form and thereafter provides an update on a quarterly basis until this is obtained.

b.     checks whether the resident paid a fee for her subletting application, and if so, considers refunding this fee.