| Publishing organisation: | Housing Ombudsman Service |
| Topic: | Home ownership and leasehold, Repairs |
| Determination: | No maladministration (recommendations) |
| Tenure: | Shared owner |
| Country of relevance: | England |
Mr M was the shared owner (50%) of a three-bedroom property in a new development. The development and sale of the property was overseen by a marketing, subsidiary division of the landlord. Maintenance was dealt with by a second subsidiary of the landlord. Mr M was somewhat confused about the relationships within the landlord’s organisation, which has a group structure.
Mr M complained about the landlord’s actions during his purchase of the property, claiming that it applied pressure on him to buy the property and that it misled him about aspects of the property. He also complained about the landlord’s response to several maintenance issues that arose after he took possession of the property.
Sale of the property
Following an open day held by a subsidiary of the landlord, Mr M reserved an interest in flat 3. Although he later viewed a one-bedroom flat, he never viewed the property he would later buy.
The landlord wrote to Mr M confirming that he would be buying a 50% share, the price of that share, and that the offer was subject to exchange of contracts by a specified date. Various other terms were outlined and Mr M was asked to give the landlord the name of his solicitor. A second letter was sent to Mr M, telling him that until he nominated his solicitor the legal processing of the sale could not begin.
The landlord took possession of the development from the builders two weeks after the original deadline for exchange of contracts. The landlord then told Mr M that the property was ready and offered him an incentive of £250 if he could complete the purchase by a set time. From this point on, communication was between the landlord’s and Mr M’s solicitors.
Mr M said that at the viewing he had raised concerns about a number of issues with the sales executive and that he received reassuring answers that “convinced him to sign the contract”. However, Mr M was employing a solicitor to advise him during the purchase and although the solicitor asked the landlord a number of questions, there was no evidence in the correspondence between them that Mr M was unhappy with the property or the terms on which he was buying it.
The landlord had to send a third and final letter to Mr M to tell him that if he did not complete the purchase by its deadline, the offer would be withdrawn and his deposit forfeited. If Mr M felt this was coercion, he did not ask his solicitor to communicate this to the landlord. In fact, the evidence showed that he was in a hurry to complete the sale as he was going on holiday.
Determination
We found no maladministration; although Mr M thought the landlord’s letters reminding him of deadlines and offering incentives amounted to unacceptable pressure, sellers often offer such incentives. Equally, all purchasers of a property are subject to deadlines. Regarding the allegation that he was misled, Mr M viewed a show flat, which is standard procedure on all such developments. There is no commitment to exactly replicate the show flat. Mr M turned down the opportunity to view a three-bedroom property and chose to proceed on the basis of the show flat.
Mr M was represented by a solicitor and had every opportunity to use his professional services to ensure that any concerns were not only raised but addressed. At every stage, Mr M was able to exercise a choice.
Defects to the property
Soon after Mr M took possession of the property he wrote to the landlord about a number of concerns he had about the property, including the accessibility of the shower. His letter also outlined his difficulties trying to understand the relationships within the landlord’s organisation and who he should be reporting problems to.
The other problems Mr M reported were all, with one exception, maintenance matters. As the property was part of a new development these were categorised as “defects” and were the responsibility of the builder. Except the fixtures and fittings, all the things Mr M was concerned about were covered by this contractual term between the landlord and the builder.
Several sections of the landlord’s organisation, such as the leasehold management team and the direct labour department, had differing responsibilities towards Mr M. Once the sale was complete, the subsidiary handed over the landlord’s responsibilities to the landlord’s leasehold management department. Any problems with the property should then have been reported to the leasehold manager.
Mr M submitted a complaint two months after moving in and asked the landlord to buy back the property. The subsidiary’s director responded on the landlord’s behalf. Although this was consistent with the landlord’s policy and provided a commendable continuity of service to Mr M, it was a source of further confusion to him. English was not Mr M’s first language; he had only been in the UK for a short time and was unfamiliar with general systems and practices, and the landlord’s in particular.
The director told Mr M that the leasehold manager was dealing with maintenance matters and offered to waive all the usual fees the landlord would incur when selling on the property, about £600. We could not establish why this offer was made; there was no repairs obligation on the landlord’s part because of the defects period, and any issue about the fixtures was a pre-sale matter. Although the offer appeared to relate to a meeting with Mr M, no records were available that might have clarified the situation. We concluded that it was a goodwill payment. We noted that the amount offered was much higher than stated in the compensation policy guidance and represented a generous attempt to resolve Mr M’s concerns.
However, a number of the maintenance problems had not been resolved and the landlord increased its offer of compensation by an extra £500 and £200 towards the cost of replacing the shower screen with a shower rail. These offers also exceeded the amounts in the compensation policy. The final compensation offer, all goodwill, was more than £1500.
Determination
We found no maladministration. Despite confusion over the landlord’s organisational structure and lines of reporting, which it acknowledged, most of the defects were addressed as soon as was practicable. The landlord acknowledged that its unclear structure made reporting the defects more difficult and made a commitment to clarifying its internal relationships and its procedures. It also made a generous offer of compensation, in excess of that in its compensation policy. We recommended that the landlord keep accurate records to provide an audit trail of its decision making.