Housing Ombudsman targets improved fairness in shared ownership complaints

The Housing Ombudsman has set out nine tests for how it may assess shared ownership complaints in future.

Investigations highlighted by the Ombudsman’s latest Insight report found errors in the sales process “leading to residents being unable to afford to purchase or incorrect charges that then come as a surprise on moving in”.

There were also cases where poor understanding of a lease agreement led to residents with months of delays to vital repairs, the Ombudsman said.

The Ombudsman claimed that while the proportion of complaints it receives each year from shared owners is proportionate to the size of the tenure, the high level of dissatisfaction amongst shared owners suggests more complaints should be escalated to the service.

To address this, the Ombudsman will undertake targeted awareness raising as well as making sure complaints procedures are accessible.

“Miscommunication, confusion over maintenance responsibilities and the complexity of shared ownership have impaired landlords response to complaints, compounded by poor knowledge and information management,” the Ombudsman said.

The Insight report highlights key aspects relating to shared ownership cases:

• Sales process: the Ombudsman identified issues in the sales process, such as delays in instructing solicitors and incorrect charges or rents. Some residents were not told the correct levels of staircasing.
• Defects: there were cases of landlords not chasing developers or following up with the residents following defects being raised.
• Cladding: there were cases that related to the Ombudsman’s Cladding guidance, including unreasonable delays in communication about documents residents may have needed or about the safety of the actual building itself.
• Repairs: the report highlights the importance of landlords understanding their obligations and effectively communicating with residents during complex works.
• Charges: the report notes an improvement in the conduct of landlords in this area following its Insight report on charges, but there were still examples of misconduct
• Managing agents/freeholders: landlords did not often effectively manage their relationships with the freeholder or managing agent of the building, leading to difficulties in communicating effectively with residents.

These issues have informed the nine key tests the Ombudsman may consider during an investigation, alongside the prospect of using Paragraph 48 of its Scheme, which allows the Ombudsman to treat an individual case as a ‘test case’ where others could have been affected.

These tests are:

1. Were responsibilities and obligations clearly communicated at the point of sale? This may include issues relating to staircasing and buy-backs.
2. Is information about charges clear, transparent, and accessible?
3. How was engagement with third parties (such as managing agents) handled to resolve service requests and complaints?
4. Has the landlord engaged with the developer where it identifies the developer is or was responsible for rectifying the issue?
5. For repairs involving shared owners of properties built after 2021, was the landlord’s handling of the initial repair period fair in all circumstances?
6. How did the landlord define “essential repairs”?
7. Was the landlord’s communication clear, accurate and timely?
8. Did the landlord handle the reimbursement claim fairly and in line with its policy?
9. Did the shared owner experience any difficulties raising their complaint or being signposted to the Ombudsman?

Richard Blakeway, Housing Ombudsman, said: “Criticisms of shared ownership stem from its inherent complexity, fundamental inequities in its design, and responsibility for residents without the same level of control.

“Whilst this report cannot fix these problems, it gives residents the opportunity to learn about complaints they can bring to us to make their housing situation better, whilst also giving landlords the opportunity to learn from the complaints we have had to provide a better service to shared owners.

“A simple concept has led to a complicated product and miscommunication has too often undermined the relationship between landlord and shared owner from outset. One of the most striking lessons from our review is the ability of landlords to successfully recover service failures in their complaints process for shared owners compared to other tenures. This must provide lessons for overall handling.”

Blakeway added: “We may be at an inflection point for shared ownership. Any future reform of shared ownership must address the recurring reasons for dissatisfaction and service failure that is so evident in our casework.”

The full report, Insight on data and individual cases relating shared ownership, is available here.

Harry Rodd