The Property Ombudsman (TPO)

Site: tpos.co.uk
Twitter: twitter.com/TPOmb
Purpose: Ombudsman for the property industry

What is an ombudsman?

An ombudsman is an official or a body who is tasked with representing the interests of consumers by investigating and addressing complaints of maladministration or a violation of consumer rights.

Ombudsmen are a superset of Alternative Dispute Resolution (ADR) services, but not all forms of ADR are referred to as ombudsmen.

In fact, ombudsmen are special because only they are allowed by Companies House to refer to themselves as ombudsmen (which is a protected word) and they earn and maintain this right by:

1. being a statutory complaints organisation; or
2. being a non-statutory body that:
   1. is certified as a provider of Alternative Dispute Resolution by a competent authority;
   2. has a proven track record in dispute resolution in the relevant complaints area, normally for at least 12 months; and
   3. holds Ombudsman-level membership of the Ombudsman Association which demands that its members adhere to strict criteria to ensure fairness, impartiality and accountability.

The UK has a number of ombudsmen including but not limited to communications and internet services, finance, housing, legal, pensions and property.

Although they all share the title of “Ombudsman”, there is a wide variance in their remit, their powers and arguably their susceptibility to bias.

There are 3 basic types of ombudsmen:

1. Statutory ombudsmen
2. Ombudsmen underpinned by statute (these are technically non-statutory, because they are not established by statute but they do exercise powers that come from statute)
3. Voluntarily set up ombudsmen (these are non-statutory)

Statutory ombudsmen

Statutory ombudsmen are established by – and get their powers from – an Act of Parliament. Their powers are therefore tailored to their respective sector and they hold statutory duties to use them.

Companies House does not require statutory ombudsmen to be members of the Ombudsman Association, although in practice they usually are.

Ombudsmen underpinned by statute

Ombudsmen underpinned by statute are not established by law, but their regulator has given them powers that come from specific pieces of legislation. This means that some non-statutory ombudsmen do actually exercise statutory powers, as counter-intuitive as that may seem.

These are private ombudsmen founded independently and generally operating as private companies on a non-profit basis.

As these are not statutory ombudsmen, in order to use the name “Ombudsman”, Companies House requires these to be approved ADR entities and to be members of the Ombudsman Association.

‘Voluntarily’ established ombudsmen in non-regulated sectors

As these are not statutory ombudsmen, Companies House requires that they are approved ADR entities (in this case, by the Chartered Trading Standards Institute, which is the competent authority for non-regulated sectors).

Companies House also requires these to be approved ADR entities and to be members of the Ombudsman Association.

What is the Property Ombudsman (TPO)?

The Property Ombudsman (TPO) sits in the 2nd tier: the ombudsmen underpinned by statute and which operate as private companies on a non-profit basis.

An ombudsman in this tier is effectively the same as any other private ADR service, except that it enjoys the right to call itself an “ombudsman”.

The problem with ombudsmen which operate as private companies

Given that 2nd tier ombudsmen are not statutory, industry entities are not obliged to subject themselves to their oversight and are in fact free to sign up with whatever ADR service they choose.

As a business, and one that often has shareholders to please, those entities are likely to choose the service that they feel provides the best return on investment (ROI).

For instance, if one ADR service agreed with the agent in 10% of cases and another agreed with the agent in 90% of cases, given that the agent is free to choose which ADR service it registers with, it stands to reason that it would choose the latter.

As each of these ADR services relies on membership fees in order to survive, they are forced to compete against each other for the favour – and memberships – of the industry entities that they are supposed to impatially mediate with on behalf of the consumer.

And in in terms of membership benefits designed to help convert prospective members into paying members, a company that is allowed by Companies House to call itself an “ombudsman” has an obvious advantage over its peers right from the start since that word has obvious connotations of fairness and impartiality – whether it’s justified or not.

Indeed, the TPO itself is aware of the value of its name and branding as enabled by Companies House, as is illustrated by the marketing material on its website which includes:

The TPO logo is recognisable by consumers and agents alike and shows your commitment to high standards of service backed up by the TPO codes and redress service.

And:

You are able to display the TPO logo to consumers and instil confidence by offering redress.

The TPO goes even further to promote other benefits of becoming a paying member with:

Membership of The Property Ombudsman (TPO) demonstrates your commitment to Professional Standards
– Increases consumer confidence
– Develops staff knowledge and service standard
– Saves you and your customer legal fees and time
– Enables you to concentrate on your business

For the right to display this logo and to enjoy all the other membership benefits listed on the website, the TPO charges its members an annual subscription fee of £195+VAT per branch, plus a one-off joining fee of £50+VAT.

But how fair and impartial can an ADR service be if it relies on one of the two parties in any dispute for its very existence and has to convince it every year to renew its membership as a paying member rather than to defect to an alternative ADR service?

In terms of consumer satisfaction, according to a Money Saving Expert report on ombudsmen, only 21% of consumers who responded viewed the TPO positively while 58% viewed it negatively.

In that same report, only two reviews relating to the TPO were published and both were negative, including:

Property Ombudsman is a members’ club funded by subscription from its members. As such it is unlikely to find against a member, especially a big player.

Reeds Rains & The Property Ombudsman (TPO)

In a previous article, I described a situation that we had found ourselves in with Reeds Rains after one of their branches, when asked, failed to disclose planning permission on a field immediately behind the property that we were viewing.

Reeds Rains is a large agent with approximately 150 branches nationwide. The company is a member of the TPO service and therefore injects approximately £30,000 into the service annually via membership fees – a sum that obviously goes some way towards covering the services’ running costs.

Since Reeds Rains refused to accept responsibility and dismissed our complaint outright, we were forced to turn to the TPO for assistance. Here is our experience.

Our experience with the Property Ombudsman (TPO)

At the beginning of September 2018, having had our claim dismissed by Reeds Rains, we turned to the TPO.

As making the initial call had fallen on myself, the first thing I wanted to do was to speak to someone in order to get a better feel for what the TPO was- and was not- able to do in a case like ours.

I got through to Elvan Scott. I explained our situation with Reeds Rains; both how they had lied about the planning permission on the field and how they had attempted to shirk responsibility with a load of nonsense. I also explained how they had left me with no option but to approach the TPO for the redress that is so proudly advertised on the Reeds Rains website.

I asked Elvan whether the TPO would be able to force Reeds Rains to arrange for an independent surveyor to calculate the harm done to the value of our property so that we had a specific figure to seek as compensation, or whether this was something that we would need to arrange ourselves and to add its cost to the claim.

Elvan advised me not to seek the services of a surveyor at this point, and to send copies of our correspondence with Reeds Rains to the TPO instead. So I went ahead and sent a complete record of said correspondence via email.

On the 11th of September 2018, I received correspondence from Karen Cooper confirming that she would be our designated “Resolution Officer“. Her job was to consider the paperwork that I had supplied “with a view of resolving the complaint at the earliest possible opportunity“.

On the 20th of September, I received another email from Karen. Within it, she requested that I complete and submit their complaints form along with any additional information to support our case.

I completed their complaints form as requested.

In retrospect, one of the thing that was a little odd about their complaints form was that it asked quite vaguely, “What would resolve your dispute?”.

This is a very open question that invites a wide range of possible answers. For example, a refund, compensation, an apology and even an all-expenses paid holiday to Las Vegas would technically be valid answers to such a question.

With Elvan’s suggestion that we do not seek a surveyor’s report ourselves still fresh in my mind, I completed that section of the form as follows:

For Reeds Rain to agree for an independent valuation of our property to take place under two different scenarios:

a) to value the property against the field being used only by locals to walk their dogs, as was the usage that was presented to us by Reeds Rains; and

b) to value the property against the field being occupied by up to 150 homes, as is the usage in reality.

I would then like Reeds Rains to transfer to us 100% of any difference plus suitable compensation for the disruption, inconvenience and loss of peaceful enjoyment of the property during these works.

Further down the form however, I noticed that it stated under “Additional Evidence“, “It is especially important to attach evidence in support of financial loss“. This statement seemed at odds with Elvan’s advice so I decided to clarify the TPO’s position on the surveyor report by asking about it in writing. The full email is attached below, but here are a couple of key quotes:

When I spoke to one of your colleagues before opening this case, I was advised that I would not yet need to provide evidence of financial loss – can you please confirm that is still the case? Because I would not want you to find in our favour and yet award £0 because we did not provide evidence of financial loss due to the advice received from one of your colleagues.

…

Please advise whether we need to secure this valuation ourselves and thus provide an updated claim form, or if Reeds Rains could be compelled to provide the service via an impartial 3rd party as originally requested.

Karen replied to this email on the 28th, in which she responded to my concerns with the following:

At this stage you will not be required to provide any further documentary evidence. An adjudicator will assess your case and should further information be required at this stage it will be requested.

This reassurance put my mind at ease, and I relaxed safe in the knowledge that if the TPO required us to provide a surveyor’s report in order to support the request that we had made in the claim form, that they would come back to us and let us know.

A few days later, on the 1st of October, Rebecca Hall – who is a Case Management Officer at the TPO – wrote to us to advise that she would be our designated case management worker. Her role was apparently to “administer the complaint and ensure its smooth progression through the next phase of the process”.

A further three days later, on the 4th of October, we received further correspondence from the TPO thanking us for our completed complaints form and confirming that they had requested Reeds Rains’ documents in support of their defence. They also attached their Consumer Guide, which is a document that outlines what a consumer can expect from the TPO.

TPO did not mention the need for us to provide a property valuation, nor did they refer again to my question specifically asking about the need to provide one.

Almost a month later, on the 29th of October, the TPO informed us that they had received Reeds Rains’ documents and pointed out that we should also receive our own copy. TPO informed us that we had until the 12th of November to submit comments in relation to their submission.

As it turned out, Reeds Rains had failed to supply us with said documents, despite the fact that they should have arrived a week prior. As such, I notified TPO and asked that the deadline of the 12th of November be extended accordingly.

A further two days later, on the 31st, the TPO responded and did what they probably should have done in the first place, which was to provide Reeds Rains’ response themselves via an email attachment.

The response that Reeds Rains sent to the TPO was just as illogical and nonsensical as the one they had sent to us, which suggested to me that rather than specifically playing some kind of tactical game with us, that they actually and genuinely did not comprehend the implications of the points that they were making.

Reeds Rains claimed that their staff were unable to recall exactly what they had informed us about the property – even though they had earlier suggested to us that the staff recalled informing other viewers about the planning. Why were the memories of their staff so adversely affected when it came to us, and yet still functioning perfectly when it came to other viewers who viewed the property before us?

Reeds Rains then pointed out that we had no evidence to support our claims i.e. we had no proof of a negative. As everyone knows, proving a negative is actually impossible. If an event did not occur, then there can be no proof of it not occurring – all there can be is proof of the contrary. And the fact that we purchased a property that turned out to have planning permission for 150 homes behind it is the proof that we were not informed of that planning, because if we had been informed of this planning then we would have made the same decision as the others viewers and gone elsewhere.

Reeds Rains then repeated an assertion they had previously relayed to us, which was that they had proof of having informed other viewers… as though this was somehow meant to count as proof that we had also been informed. We are not aware of any shared subconscious that unites humanity, and it has always been our understanding that informing person A of a fact does not lead to person B being aware of it without also being informed of it themselves.

And finally, they provided a solicitor’s search, as though a search performed by a solicitor at a subsequent phase of a property purchase somehow excuses them from their obligations under the Consumer Protection from Unfair Trading Regulations 2008 during the earlier phases.

I responded immediately and pulled apart each of their points as above.

On the 2nd of November, Rebecca, our designated Case Management Officer at the TPO, responded and thanked us for our comments. These comments would, apparently, be taken into account when our complaint was considered.

TPO then confirmed that they had now received all the information required for them to consider our complaint against Reeds Rains.

One can only assume that when the TPO said “all the information required”, that this included any documents that we had specifically and repeatedly asked whether we should provide, as well as any documents that TPO had previously informed us that they would request if they were needed. Such as a surveyor’s report, for example.

Almost 3 months later, on the 30th of January 2019, Sarah Watson, an Adjucator at the TPO, informed us that our case had been allocated to her to carry out a formal review and to propose a decision on behalf of the TPO.

Sarah agreed that the conveyancing process did not excuse Reeds Rains from their obligations, but she wanted to know whether or not we had commissioned a plan search during that process.

Although Sarah had taken the time to write to us to ask us about the conveyancing process that was followed, she apparently did not feel the need to take this opportunity to request any documents that might assist in her investigation in the manner that Karen had confirmed back in September that the TPO would do. Such as a surveyor’s report, for example.

I replied to Sarah immediately – within 20 minutes in fact – with the information that she requested.

Sarah replied – within just 10 minutes – to thank me for answering her question so quickly. Once again, she made no appeal for any additional documents that she felt may have assisted her in her investigation. Like a surveyor’s report, for example.

On the 7th of February, we received correspondence from Theresa Maginn, another Case Management Officer at the TPO. Attached to her email was further correspondence from Sarah Watson as well as a report on her findings and her decision.

The TPO, after seeking advice from Warwickshire County Council Trading Standards, concluded that the planning permission of 150 homes in the field behind the property that we purchased was material information.

Furthermore, the TPO asserted that Reeds Rains was fully aware of the planning permission at the time the property was marketed by them, and that Reeds Rains should therefore have ensured that we, as prospective purchasers, were advised of said planning when we viewed the property.

The TPO further asserted that there was no evidence that Reeds Rains had disclosed this information to us at any point, which by definition meant that the service provided by Reeds Rains fell below that expected of them under the relevant paragraphs of the Code.

Our complaint was therefore supported by the TPO.

Having established that we were in the right and that Reeds Rains was in the wrong, it then fell on TPO to decide on an award. And this is where the matter of the surveyor’s report – a document that we repeatedly asked TPO whether we needed to supply in advance of their investigation and which TPO repeatedly refused and confirmed that such additional information would be requested if it was required – was to culminate in a spectacular display of either gross incompetence or blatant bias.

The Complainant has not submitted an estate agent’s or surveyor’s opinion of the market value of the Property now that building work has begun. However, I cannot speculate on the affect the development will have on the Property’s value and whether the price paid took this into consideration. I do not dispute that the building work has affected the characteristics of the Property. However, I cannot safely determine, based on the evidence provided, that the Property has depreciated in value and by how much.

…

I have supported the complaint to the extent that an award of compensation is merited in the circumstances for the inconvenience caused by the shortcomings identified. It is not within my remit to fine or punish an agent and therefore, my award is modest to reflect this in accordance with my Terms of Reference. I cannot speculate on the value of the Property and I am satisfied the Complainant had the opportunity to discover the planning permission approval during the conveyancing process.

The TPO clearly placed the blame for being unable to award suitable compensation for Reeds Rains’ failures on the fact that no surveyor’s report had been supplied, and that it was unable to reach a figure without such a document.

This of course was the same surveyor’s report that the TPO had itself repeatedly informed us that it did not require (it explicitly had “all the information it required”, after all), and an example of further information that it had confirmed that it would request from us if it was required for the investigation. But no such requests were made.

The report concluded with three options:

1. For us to accept their finding and award
2. For us to object to their finding and refuse their award
3. For us to request that the TPO reconsider their case in light of exceptional circumstances such as the presence of a significant error in fact that would have a material effect on the decision or where significant new evidence could be produced.

We chose the third option and we appealed.

We pointed out to the TPO that the absence of a surveyor’s report – a document that they had cited as a reason for being unable to issue a suitable award – was absent firstly because the TPO itself – via two separate employees i.e. Elvan Scott and Karen Cooper – had advised us that such a document was not necessary when the complaint process was started; and secondly because the TPO itself had not requested such information from us at a time when the information was clearly required, even though they had explicitly confirmed to us that any information that they required during their investigation would be requested.

If a surveyor’s report was required in order for the TPO to form a central pillar of its conclusions – that being the sum of the award to issue following our victory against Reeds Rains – then why was it not requested in the manner that TPO had confirmed that such information would be?

More importantly, if such a document was so vital in the making of such a decision, why did TPO twice inform us that it was not necessary for us to obtain it?

Additionally, we pointed out that the supply of such a report had formed part of our statement under the “What would resolve your dispute?” section of their complaint form, where we had been invited via an open question to state the circumstances that would enable us to consider the matter resolved. If such a request was not within the remit of the TPO to require of Reeds Rains, why even ask us for such a statement in the first place? This section served no purpose other than to lead us down a garden path.

Next, we pointed out how nonsensical it was for the TPO to default to the position that in the absence of a report that it had itself informed us that it did not require, that the material harm that had been inflicted on the value of our property by the construction of the development in the field behind it was assumed to be equal to £0.

We pointed out how ridicilous it was that the TPO had taken this position despite acknowledging that the balcony at the rear of the property – which had previously overlooked an open field but was now due to overlook 150 homes – was “evidently a feature of the property” which to a prospective buyer was clearly therefore a factor in determining the property’s desirability and therefore its market value.

In defaulting to the position that the harm done by the development to the value of the property was £0, the TPO left the only reason for compensation to be for “the inconvenience caused by the shortcomings identified” for which they awarded a token sum of £500.

We asserted that if the TPO was in fact unable to determine for itself – or to instruct Reeds Rains to determine via an independent 3rd party – the harm done to the value of our property, that they had an obligation to allow us the opportunity to determine this harm, rather than to simply assume that the harm was equal to £0.

Finally, we conveyed the feeling that we might have been tricked by the TPO and that we felt that our case might have been deliberately sabotaged by an organisation that was protecting a significant paid-up member.

Almost two weeks later, on the 19th of February, the Katrine Sporle CBE, MSc of the TPO responded.

Katrine started by attempting to reassure us that member agents paid a subscription to TPO in order to fulfil their legal obligations, and that this benefitted consumers.

I should firstly explain that member agents pay a fee to TPO to fulfil their legal requirement to register with a redress scheme. This enables consumers to benefit from a free alternative dispute resolution service.

What the response failed to disclose was the fact that subscribing to the TPO was completely voluntary and that a member was free to subscribe to any number of alternative dispute resolution services with the TPO being just one option.

The response further failed to acknowledge the argument that as a commercial entity, it would make commercial sense for an agent to maintain an active subscription to whichever ADR service provided the best return on investment i.e. whichever one, for example, was most effective at minimising compensation awarded to aggrieved customers.

Having been presented with the hard facts concerning their advice to us on not obtaining a surveyor’s report and the fact that the TPO had neglected to request such information from us even after stating in writing that they would request any information that they required for their investigation, the TPO seemed to shift its position on the significance of such a report.

From stating that they were unable to determine an award based on the harm done to the value of the property due to a lack of surveyor report, the TPO’s position suddenly became that a surveyor’s report would have been useless anyway since a survey would have been subjective and that all surveyors would probably provide a different valuation.

I do not consider a surveyor’s opinion would have allowed me to draw an (sic) more certain conclusion. This would represent one opinion of the value now whereas an estate agent’s opinion of a marketing price may differ. As you have not sold the Property, I do not consider any one party can conclude how the housing development has affected the Property’s value. When a property is sold, market trends at that time will affect the sales price. I cannot, therefore, conclude that you have incurred financial loss as a result of RR’s shortcomings.

Katrine seemed to be suggesting that one of the core responsibilities of an estate agent or a surveyor is subjective to the point of being useless, that valuations are not a recognised industry measurement and that the only way to accurately establish the value of a property is to sell it.

Katrine ended her response by suggesting that the TPO had provided us with every opportunity for an independent and impartial examination of our case.

Your complaint has been comprehensively considered by this Office on two separate occasions. In assessing your original review and this representation, I am satisfied that you have been afforded every opportunity for an independent and impartial examination of your case.

When we first received the TPO’s report, we had initially assumed with equal measure that the ombudsman was either incompetent or biased towards Reeds Rains. But after its determined and deliberate defence of its conclusions and its shifting stance on the value of a surveyor’s report to suit a changing narrative, we felt forced to discount incompetence and to conclude that the ombudsman was deliberately biased towards its paid-up member.

Faced with such behaviour from an ombudsman, we felt that we were left with no option but to challenge the TPO’s legitimacy and to list explicitly the reasons that we felt the TPO had failed in its responsibilities and in its obligations to the Ombudsman Association. We outlined our case for the TPO being expelled from the Association and stripped by Companies House of its right to call itself an Ombudsman unless it took the necessary steps to salvage its flawed and biased investigation.

This argument was based on the fact that the criteria for members of the Ombudsman Association includes:

1. The Ombudsman should be impartial, proceed fairly and act in accordance with the principles of natural justice. They must take into account what is fair, good practice, inequitable conduct and maladministration.
2. The ombudsman, staff and any governing body should be seen to be responsible and accountable for their actions.

We felt that the TPO had failed to meet that criteria due to the following:

1. TPO sabotaged our case by advising us to open a dispute against Reeds Rains without first obtaining a valuation from a surveyor. TPO then used this lack of valuation as a reason to award £0 towards the damage done to the value of our property despite conceding that a significant part of its character had been adversely affected. This is a gross failure of process.
2. When we reminded TPO of the advice that they supplied and that this advice was the reason no valuation was provided, TPO suddenly changed their mind on the significance of such a valuation and stated that it would not have enabled them to make a judgement after all. This is dishonest and duplicitous.
3. TPO failed to take responsibility or accountability for this fatally flawed and misleading advice. Upon learning of this gross error, TPO did not correct their mistake, did not apologise for it and in fact did not even acknowledge it. This is an abject failure of “be seen to be responsible and accountable for their actions”.
4. TPO agreed that its member broke the law by violating the Unfair Trading Regulations 2008. There is an obvious cost to us as a result of this dishonesty, albeit a currently unknown one due to TPO’s advice not to hire a surveyor. However, rather than instructing its member to quantify the result of its dishonesty by employing an impartial 3rd party surveyor to value our property, TPO made the bizarre, completely unrealistic and obviously biased assumption that the cost of the damage caused was equal to £0. This is an abject failure of “proceed fairly and act in accordance with the principles of natural justice”.

To our diminishing surprise, the TPO responded by attempting to further defend their position which left us with no option but to take our complaint to the Ombudsman Association.