Social Housing Speed Read: Housing Ombudsman introduces key tests for assessing shared ownership complaints
12th November, 2024
This speed read focuses on the new tests that the Housing Ombudsman has introduced to assess shared ownership complaints
What is shared ownership?
Shared ownership is where a buyer purchases a share of the property and pays rent to a landlord on the remaining share (along with ground rent and service charges). The buyer has the option to purchase more shares in the property through a process known as ‘staircasing’.
Why have the new tests been introduced?
The Ombudsman’s latest report states that the dissatisfaction rate amongst shared owners is higher than for social renters however, the volume of complaints has not risen in line with this. Therefore, the Ombudsman has introduced new tests with the aim that it will inform residents about the types of complaints they can make (ultimately improving their housing situation).
Similarly, it is intended that landlords observe the new tests and learn about the key areas where complaints arise (prompting them to improve their services).
The key tests
The Ombudsman highlighted several areas where landlords could improve, based on evidence provided by the watchdog. Those problem areas have informed the key tests as follows:
- Sales process – the Ombudsman found that landlords had delayed instructing solicitors and incorrectly reported rent and staircasing to residents. These errors in reporting resulted in residents being unable to afford the purchase.
- Defects – the Ombudsman found that landlords were not chasing developers during the two-year defect liability period. There was also evidence of landlords not following up with residents after defects were reported.
- Cladding – the Ombudsman found unreasonable delays in providing residents with documents relating to the safety of the building.
- Repairs – the Ombudsman found that some landlords had a poor understanding of their lease agreement (and repair obligations) which resulted delays to vital repair works.
- Charges – the Ombudsman found instances where prospective residents were incorrectly advised on charges.
- Managing agents and freeholders – the Ombudsman found that landlords did not effectively manage their relationships with the freeholder or managing agents.
When assessing shared ownership complaints, the Ombudsman will consider the key tests in conjunction with Paragraph 48 of the Housing Ombudsman Scheme (which allows the Ombudsman to treat an individual case as a ‘test case’ where others could have been affected).
Key takeaway for landlords
Landlords should be vigilant about the new key tests to ensure they are compliant with the standards of the Housing Ombudsman.
Landlords should do the following to comply with the new tests:
- Sales process – promptly instruct solicitors and correctly report rent and staircasing charges.
- Defects – chase developers on any defects promptly and within the limitation period. Landlords should ensure that they are following up with residents after defects are reported.
- Cladding –promptly provide residents with safety documents relating to the building.
- Repairs – ensure that they are aware of their repairing obligations in the lease agreement.
- Charges – clearly communicate with residents about what they are being charged for and the services they can expect to receive in return.
- Managing agents and freeholders – effectively manage their relationships with the freeholder or managing agents which will in turn improve their communication with residents.
For more information about shared ownership or housing compliance, please do get in touch with Melanie, or another of our expert Social Housing Specialists.
Please note that this briefing is designed to be informative, not advisory and represents our understanding of English law and practice as at the date indicated. We would always recommend that you should seek specific guidance on any particular legal issue.
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