29 March 2018
Social Housing Division
Ministry of Housing, Communities and Local Government
3rd Floor, Fry Building
2 Marsham Street
MHCLG – Consultation on strengthening consumer redress in the housing market
This response to your consultation is on behalf of The Federation of Private Residents’ Associations, which as far as we know, is the only national body that represents the voice of leaseholders in England and Wales.
We have over 500 member associations representing tens of thousands of individual leaseholders.
We have drafted this response on the basis of our regular daily contact with our members who inform us of the problems they encounter in the leasehold sector and we have analysed those contacts so that we understand and can convey to you the problems faced from a leaseholders’ perspective.We have a committee of over 30 volunteers and this response has been drafted using their expertise in addition.
We have campaigned for 45 years to promote honest practice in the housing sector and against scandalous mal-practice, evident in critical tribunal rulings, two investigations by the Office of Fair Trading, one Law Commission report, debated in Parliament and reports to the All Party Parliamentary Group as well as many other places.
In the context of your consultation we are of the firm opinion that this can only be achieved by reforms to landlord and tenant legislation and fairer dispute resolution process that is simplified and accessible to consumers. We also believe that standardisation and clarity of management service standards is vital to ensure greater consistency and reduce disputes over terms of contacts.
It is essential to have a single housing ombudsman with sufficient resources to meet the need for prompt and fair resolutions.
We trust that the Government’s intention to restore the broken housing section will be shortly be realised. Many of our members were extremely disappointed, following the Competition and Markets Authority leasehold enquiry, in 2014, and the subsequent failure of Government to make necessary changes and bring the law in line with the principles of truth, justice and openness, enshrined in Consumer Protection Law. Further, this organisation and others have been inundated over the last six months with consultation requests and call for evidence requests from different parts of Government.
We sincerely hope that all the different aspects can be brought together and actual action taken in a coordinated way. From what we are seeing, there is clear concern over the state of the leasehold sector but there is a failure to co-ordinate and have a clear path to improvement.
We would welcome the opportunity to answer any other questions and help communicate the final decisions to leaseholders, pending which our answers to your specific questions are shown on the attached pages.
We look forward to hearing further from you.
FPRA Voluntary Chairman
Q1: Are you responding On behalf of an organisation – the Federation of Private Residents’ Associations
Q2: If you are an individual, in which capacity are you completing these questions? N/A
Q3: If you are an organisation, which of the following best describes you?
- Other (please specify) National representative body
Q4: Have you ever made a complaint relating to the renting, selling or purchasing of your property, or relating to the management or maintenance of a property in which you are a renter or leaseholder? Yes our members have.
Q5: If you have complained about the renting, management, selling or purchasing of your property, who did you complain to? (Tick all that apply)
Our Members have to:
- Estate Agent
- Managing Agent (Leasehold)
- Letting Agent
- Landlord (RSL)
- Redress scheme
- Charity (e.g. Citizens Advice, Shelter)
- Politician – local or national
- Other [please list]
Q6: Have you used any of the following housing redress schemes (as a consumer or organisation) in the past five years? (tick the one that you used most recently) If not move to question 9
Our Members have:
- The Housing Ombudsman
- The Property Ombudsman
- Ombudsman Services: Property
- The Property Redress Scheme
- The Consumer Code (Independent Dispute Resolution Service)
- Local Government and Social Care Ombudsman (only regarding its housing- related functions)
- Other [Please identify]
Our feedback indicates general dissatisfaction with complaints not being promptly and fairly investigated and reviewed in accordance with landlords’ internal procedures. Politicians’ involvement is rarely helpful – very few are trained mediators or arbitrators, most are too busy to commit to the task. The Housing Ombudsman received 8,724 enquiries and 6,139 complaints in the year ending November 30, 2017, which indicates the scale of problems. It claimed to have assisted with ‘progressing 4,464 cases through a member landlord’s complaint process within the ‘Local Resolution process.’ But from some feedback, we understand that this figure may be questioned. Many complaints from residents fade away.
Q7: If you answered Q6, how would you rate the service that you received out of 10? (With 1 being very poor and 10 being exceptional) Please give details – for example how helpful was the organisation at resolving the problem
Our members who responded advised “– 1”
Q8: What do you consider to be the main problem with redress in the housing market, if any (tick up to three):
Our members advised:
- There is no problem
- It is not clear how to raise a complaint
- It is not clear who to raise a complaint with
- There are gaps in redress
- Schemes are inconsistent in the way that they handle complaints
- It takes too long to get a decision or a complaint resolved
- It is expensive
- Complaints are not handled fairly
- Not everyone has the same access to redress
- When decisions are made they are not enforced
- Worried about the consequences of complaining (particularly in the retirement sector)
- Overlap between schemes
- Other [please explain]
The main problems with redress in the housing market is
1) There is a major imbalance of power between landlord and tenant; Some landlords own thousands of properties and their tenants are fragmented across large areas or regions; tenancy and leasehold legislation is highly complex – landlords have the vague ‘expectation’ to present information/ misinformation, make decisions and do/not do anything without truly considering the needs and preferences of tenants and few specific, legal obligations; tenants have very specific obligations and the right to scrutinise and challenge the ‘reasonableness’ of service performance and charges. Tenants’ associations are often required to adhere to stringent standards in order to be ‘recognised.’ Very few tenants are members of landlords’ governance and any scrutiny panels are tokenistic and have extremely little influence. Fewer local councillors sit on Boards of Directors of housing associations that mostly have transferred to the ‘private sector.’
2) ‘Internal complaints’ are not handled fairly;
3) It takes too long to get a decision or a complaint resolved. There are numerous voluntary codes of practice in the housing sector that apply to different trade/professional organisations, and ‘regulatory framework.’ Many standards and codes are often unspecific and easily contested by claims that ‘practices adhere to regulatory standards or ‘currently meeting all legal obligations.’ ‘Redress’ schemes operated by these organisations determine outcomes of complaints against their members whose interests they actively promote and protect. Sanctions do not provide a sufficient deterrent to change unfair practices. In cases where landlords engage in denial, prevarication and intransigence, tenants are driven to exercise their right to challenge at a Tribunal to determine ‘reasonableness.’ Few tenants and residents associations have the capacity to embark on long and risky ventures- especially the elderly.
4) Legal procedures, with the need for expert advice, are too expensive;
5) There is much worry and stress about the consequences of complaining – especially people over the age of 75, who often lack the knowledge and confidence to complain, and worry about the impact complaining might have on their future services. http://www.ombudsman.org.uk/about-us/news-centre/press-releases/2015/frail-older-people-too-afraid-to-complain-about-poor-care
Q9: Which solutions below do you think would best improve redress in the housing sector (please pick up to three)
- Better awareness from consumers of how to raise complaints
- Improvements to the working of existing redress schemes e.g. more timely complaint Handling
Our members feel that a simple unified approach is required with the following added:
1) Streamlined redress provision in housing (see question 30)
2) Better enforcement of redress scheme decisions
3) Schemes all operating to the same criteria/standards
4) A code of practice for all housing providers (e.g. landlords, agents, housing associations, developers) on complaints handling – A code of practice must be specific and processes must be adequately and proactively scrutinised by an independent ombudsman.
Q10: Could more be done to improve in house complaint handling for housing consumers?
Yes [please explain]
Create an independent Housing Standards Agency with specific/measurable standards and enforceable sanctions. We believe that much more could more be done to improve in house complaint handling for housing consumers and recommend the creation of an independent powerful Housing Standards Agency with specific/measurable standards and enforceable, effective sanctions.
Q11: Are there common practices that housing consumers and businesses should be able to expect from a redress scheme, or do different sectors in housing require different practices?
- Yes – there should be common practices for consumers
- No – different sectors require different practices
- Not sure
Q12: If you believe there should be common practices that consumers should be able to expect from a housing redress scheme, what should they include? (pick as many as relevant)
- Rules relating to the types of issues consumers can complain about
- Rules relating to the timeframe in which consumers can complain to a provider
- Policies to support awareness raising
- Timeliness of complaint handling
- Cost to consumers
- Compensation levels
- Codes of practice specific to the sector
- Cost to members/ payment structures
- Transparency of decisions
- All apply
- Other [please explain]
Q13: Do you think that a redress scheme should publish decisions and the number of complaints relating to different providers? Please explain why.
- Yes – CEO and Board of Directors must be accountable and there must be an effective deterrent. This should include professional institutions.
- Not sure
Q14: What is a reasonable time frame for a redress scheme to deal with a complaint?
- Less than 2 weeks
- More than 2 weeks but less than a month
- More than a month but less than six weeks
- More than six weeks but less than two months
- More than two months but less than three months
- 3-6 months
- 7-12 months
- More than 12 months
- It depends on the complexity of the case
Q15: How should a redress scheme support consumers to access its scheme? Clear easy to understand process which is well published. We believe that a redress scheme should support consumers to access its scheme by a statutory instrument requiring landlords and associated companies to include specific standards of service and accounts; clear processes for customers (and their advocates) to express a complaint, setting out clear service standards for responding to complaints and details of what to do if they are unhappy with the outcome of a complaint.
Q16: What kind of sanctions should a redress scheme have access to? (tick all that apply)
Our members requested some/all of these:
- Financial award up to £25,000
- Financial award greater than £25,000
- Expulsion from scheme
- Power to make decisions binding
- Referral to enforcement agent/ regulators
- A range of options depending on the type and size of provider
- Other [please list]
Q17: Have you encountered any gaps between different issues, ombudsmen and redress schemes in terms of their areas of responsibility?
- Yes [please explain]
- Not sure
NO Information available to answer
Q18: Should purchasers of new build homes have access to an ombudsman scheme?
- Not sure
If you have answered no, please go to Question 21.
Why should the age of a property be a factor?
Q19: Is there an existing ombudsman scheme that is best placed to deliver this? If so which? Housing Ombudsman Service (with much greater resources.)
Q20: Should this body be statutory?
- Not sure
Q21: Aside from the issues discussed in section three of this document, are there other things we should be considering to ensure that complaints are dealt with swiftly and effectively by homebuilders? Special considerations for sheltered/retirement housing for more vulnerable people and we would like to explore this further.
There are concerns about the inter-relationship/partnerships between different parts of the sector that leave them open to abuse. Eg. where the freeholder or house builder has recommended suppliers who are not truly independent.
Q22: Should the requirement for private landlords to belong to a redress scheme apply to all private landlords?
- No – it should only apply to landlords that don’t use an agent to provide full management services
- Don’t know
- However we have concerns about this proposal that would need further consideration.
Q23: Who is best placed to provide a redress scheme for private landlords?
- The existing redress schemes in the private rented sector
- The tenancy deposit schemes
- A new ombudsman, such as a single housing ombudsman
- Other [please explain]
Q24: How should redress scheme membership for private AND SOCIAL landlords be costed?
- A flat rate (and how much do you think it should cost?)
- A tiered system according to the number of properties a landlord lets?
- A pay per complaint system
- Don’t know/this question isn’t relevant to me
Q25: How should the requirement to be a member of a redress scheme be enforced and by whom? And are there any other markets we can learn from in order to ensure compliance by a large number of small scale providers?
Local Authorities in first instance in light of their other responsibilities in this sector.
Q26: What should the penalty for initial non-compliance be? If a financial penalty, what would be an appropriate level of fine? (tick as many as appropriate)
- Financial penalty [please give details on suggested level of fine in the box below]
- Criminal offence
- Banning order
- Loss of right to evict tenants under Section 21 (but also consider not using this due to the ever increasing number of items being added by other legislation/consultations.
- Civil sanction such as improvement notices or enforcement notices.
- Other [Please explain]
- Don’t know/This question isn’t relevant to me
Q27: How can Government best ensure that landlords are aware of their requirement to belong to a redress scheme?
Via Publicity, Trade & Professional bodies, Solicitors, Local Authorities, other Government agencies, Websites & government & other publications.
Q28: Are there any other voluntary or medium term measures that could be implemented to improve redress for tenants in the private rented sector ahead of any legislative changes?
Voluntary self-regulation does not offer sufficient protection.
Q29: Do you think that freeholders of leasehold properties should all be required to sign up to a redress scheme?
- Not sure
We have a mixed opinion, where our members self-manage, use Right to Manage or similar the feeling is no as there are other means, but where a Third Party Freeholder is present then Yes. This needs further careful consideration.
Q30: Should we streamline redress provision in housing, and if so, what would be the most effective model? Please explain below what you see as the benefits and challenges of the options.
- Yes – One single ombudsman scheme covering housing issues
- Yes – One ombudsman portal for housing related complaints – because of the complexities,
- Yes – One ombudsman for private housing and another for social housing
- Yes – One ombudsman for each sector of the housing market (e.g. one for home buying, one for new build homes, one for private rented sector, one for the social sector, one for leaseholders)
- Other [please list]
Please provide details and explanation
Q31: If you ticked ‘Yes’ to one ombudsman or one portal above then which areas of redress should be incorporated? [Please tick any areas you believe should be included and explain any reasons for inclusion or exclusion]
- Social housing tenants
- Private rented sector tenants
- Leaseholders with a private sector freeholder
- Leaseholders with a social housing provider as freeholder
- Purchasers who have bought a new build home
- Purchasers and sellers of existing homes
- Park home owners
- Persons approaching their Local Authority for homelessness advice
- Persons applying to a local authority for social housing
- Persons applying for a tenancy with a housing association
- Other [Please Identify]
Please note there are some new-build, mixed tenure blocks – some leasehold, some social, some ‘shared’ ownership – to have a separate ombudsman for each sector would be inefficient.
For tenants of registered providers of social housing, the main problem can be the independent Regulator of Social Housing, who are responsible for regulation. It sets the Economic and Consumer Standards that registered providers are required to meet. The Regulator proactively regulates private registered providers on their Economic Standards, but can only monitor and enforce the Consumer Standards on a reactive basis. It may only intervene on failures to comply with Consumer Standards where they have caused (or could cause) serious harm to tenants.
But when an RSL fails to have an approach to complaints that is clear, simple and accessible and fail to ensure that complaints are resolved promptly, politely and fairly. Fairly conduct, it places an often great burden on tenants, especially vulnerable elders, to endure denial and procrastination and provide evidence of harm.