Summary: Mr B complained the Council delayed in removing a legal charge from his late mother’s property which delayed the sale and caused him extra costs. We found the Council was at fault for not removing the charge in the summer of 2022. It has agreed to pay Mr B £400.

The complaint

1. Mr B complained that Redcar & Cleveland Council (the Council) delayed in removing a legal charge on the property of his late mother, following payment of the charge in July 2022. Mr B believes this delay caused the sale to collapse in January 2023 and led to him incurring council tax charges for a further three months and losing interest on the proceeds of the sale.

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The Ombudsman’s role and powers

2. We investigate complaints about ‘maladministration’ and ‘service failure’. In this statement, I have used the word fault to refer to these. We must also consider whether any fault has had an adverse impact on the person making the complaint. I refer to this as ‘injustice’. If there has been fault which has caused an injustice, we may suggest a remedy. (Local Government Act 1974, sections 26(1) and 26A(1), as amended)
3. If we are satisfied with an organisation’s actions or proposed actions, we can complete our investigation and issue a decision statement. (Local Government Act 1974, section 30(1B) and 34H(i), as amended)

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How I considered this complaint

4. I have considered the complaint and the documents provided by the complainant, made enquiries of the Council and considered the comments and documents the Council provided. Mr B and the Council had an opportunity to comment on my draft decision. I considered any comments received before making a final decision.

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What I found

5. Mr B’s mother, Mrs C, died in April 2022 following several years in a care home. She had deferred payment of approximately £30,000 of care fees owed to the Council by a legal charge on her property. This meant that when the property was sold the debt would be paid from the proceeds. She had rented out the property after she went into a care home.
6. On 7 June 2022 Mr B obtained probate (permission to administer Mrs C’s estate). The property was exempt from council tax for six months from this date. On 20 July 2022 Mr B paid the outstanding charges. He says he spoke to staff from the social care and finance teams on two occasions advising them that the charge needed to be removed from the property. He says he was told the matter would be referred to the legal team and it would be removed in two to three weeks. Mr B has provided evidence that he made a call lasting for 16 minutes on that day and another lasting 6 mins about an hour later when he made the payment. The Council emailed him a receipt at 11.48 am.
7. The tenants moved out in September 2022 and Mr B put the property up for sale. He expected the sale to complete by December.
8. On 17 November 2022 Mr B’s solicitor asked the Council to provide details of the balance outstanding on the legal charge. On 22 November 2022 the finance team instructed the legal team to remove the charge. The Council sent a request to remove the charge to the land registry on 28 November 2022. The land registry requested further information on 23 December 2022 which the Council provided on 17 January 2023.
9. Mr B became liable for council tax on the property on 6 December 2022.
10. On 18 January 2023 Mr B telephoned the Council to request it expedited the removal of the charge because the delay meant the buyers had pulled out and he had to re-market the property.
11. The land registry removed the charge on 24 January 2023 and the new sale completed 21 April 2023.
12. Mr B had complained to the Council that he had to pay an extra £547 council tax and lost interest on the proceeds of the sale due to the Council’s failure to remove the charge as agreed in the telephone call of July 2022.
13. The Council replied saying:
• As result of the issues raised the finance team were liaising with the accounts team to put in place a new system to alert staff when a payment against a charge had been made.
• It apologised that steps were not taken between 20 July and 17 November 2022 to remove the charge.
• It was not aware until 18 January 2023 that there was any urgency to the situation when it expedited the matter.
14. Mr B disputed the response and told the Council he had spoken to staff on 20 July 2022. He also questioned why the matter was not speeded up after 17 November 2022 after his solicitor contacted the Council.
15. The Council responded at stage two of its complaints procedure. It agreed that the Council was responsible for the delay between July and November 2022 in removing the charge from the property. It said the finance team should have instructed the legal team shortly after Mr B paid the charge on 20 July 2022. It apologised for not doing so and said it had improved its procedures for the future. However, it did not find evidence that the Council’s failure was the sole reason for the sale falling through
16. Mr B escalated his complaint to stage three. He said there was no evidence the sale would not have completed had the charge been removed sooner. He said the delay had caused uncertainty. It was a small chain and the buyer’s mortgage offer had expired. But the Council maintained its view that it was not responsible for the sale falling through and it did not know until 18 January 2023 that the matter should be expedited.
17. Mr B complained to us.

Analysis

18. The Council accepts it should have removed the charge from the property shortly after payment was made on 20 July 2022 and has apologised for the failure. It does not agree that its failure was responsible for the collapse of the sale of the property and the subsequent extra council tax Mr B incurred or the loss of interest on the proceeds.
19. I agree the Council was at fault for not removing the legal charge within one month in accordance with its telephone conversation with Mr B on 20 July 2022. I have not concluded that this fault directly led to the sale of the property falling through as there are many unpredictable factors which affect a property sale. However, I do agree that it created distress for Mr B when he realised that the charge had not been removed and uncertainty that the sale was delayed due to this error. If the charge had been removed in the summer of 2022 there is a higher chance that the sale would have completed sooner.
20. I do not consider the Council was at fault after 17 November 2022 because it was not aware until 18 January 2023 that the sale was at risk. I note once the Council was aware of this risk it ensured the legal charge was removed in a matter of days.

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Agreed action

21. In recognition of the injustice caused to Mr B I recommended the Council within one month of the date of my final decision pays Mr B £400.
22. The Council has agreed to my recommendation and should provide us with evidence it has complied with the above actions.

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Final decision

23. I consider this is a proportionate way of putting right the injustice caused to Mr B and I have completed my investigation on this basis.

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Investigator's decision on behalf of the Ombudsman