Summary: The Council took around nine months longer than it reasonably should have to complete the sale of the leasehold interest on Mrs B’s council flat under the Right to Buy Scheme. This meant Mrs B was paying rent when she should have been paying the mortgage towards her house purchase; she incurred more solicitor’s costs. The Council will pay Mrs B an amount equivalent to the rent paid during the period of delay and a further £300 in recognition of the time and trouble its actions caused her. The Council will review its processes, so delays do not recur.

The complaint

1. Mrs B complains the Council:
• delayed in completing the transaction when she applied to buy the leasehold of the Council house she lives in; and
• did not respond properly to her complaints about this.
2. This meant that Mrs B was paying rent when she should have been paying the mortgage towards her house purchase. She also incurred more solicitor’s costs.

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The Ombudsman’s role and powers

3. 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)
4. The law says we cannot normally investigate a complaint when someone could take the matter to court. However, we may decide to investigate if we consider it would be unreasonable to expect the person to go to court. (Local Government Act 1974, section 26(6)(c), as amended)
5. If we are satisfied with a council’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

6. I considered the information provided by Mrs B and discussed the issues. I considered the information provided by the Council including the key documents from the file. I also considered the law and guidance set out below. Both parties have had the opportunity to comment on a draft of this statement.

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What I found

The law and procedure

7. Section 119 1985 of the Housing Act gives secure council tenants the right to buy the property they are living in at a set discount. There is a strict procedure for applications.
8. Once a council receives an application from a tenant to buy their property, they have four weeks to issue a notice confirming the applicants are eligible (RTB2). They have eight weeks to send the applicant a formal offer letter under Section 125 of the Act (RTB4).
9. The tenant then has 12 weeks in which to decide whether to go ahead with the purchase. The tenant can at this stage ask the District Valuer to value the property. If she does, the 12 weeks to decide runs from the Valuer’s determination.
10. If a council fails to meet the timescales, the applicant may serve an ‘Initial Notice of Delay’ form (RTB6). If they receive no response to this within a month, they may send an ‘Operative Notice of Delay’ form (RTB8). Once the RTB8 form is sent, a council (as landlord) may need to refund rent paid during the period of delay.
11. The law gives the applicant the right to ask the County Court to decide any question about the right to buy except the valuation, which can be determined by the District Valuer.

My consideration of the Ombudsman’s jurisdiction

12. I have exercised discretion to investigate this complaint.
13. Mrs B’s solicitor served notices on the Council and so ultimately, she had the right to ask the court to remedy the delay. I have exercised discretion to investigate this because the court may not intervene once the transaction is complete, and it would not have been reasonable to ask Mrs B to postpone completion to allow the court to settle matters.

What happened

14. Mrs B lives in a council owned flat which is part of a small development. She applied to buy the leasehold interest of this under the right to buy process on 12 January 2018. The Council valued the leasehold interest and offered a purchase price to Mrs B, which she accepted. The Council passed the file to its legal department on 14 June 2018. The transaction was finally competed on 17 May 2019.
15. The Council has said there was delay on both sides. It says Mrs B’s solicitor contributed to this by insisting the Council grant a lease rather than using its standard transfer document, and that it asked for some standard terms to be changed which the Council says was unnecessary.
16. The Council’s solicitor sent Mrs B’s solicitor a draft transfer document. Mrs B’s solicitor told the Council that it should be a lease document on 22 June and the Council agreed this on 31 July. However, this disagreement did not have a material impact on how long the transaction took. The main issue was around getting an accurate plan and proving ownership (known as title) to all parts of the interest to be transferred.
17. It took from 14 June to 15 October for the Council to send a draft lease and plan showing the land to be transferred. However, there were inconsistencies between the lease, the plan and the title deeds and so Mrs B’s solicitors asked the Council to go over this again. It served a Notice of Delay on the Council on 6 November.
18. The Council responded on 12 November with a final draft lease and plan, but the plan was still not correct. Mrs B could not complete the transaction without the correct plan and the correct title.
19. The files show that on 27 November, the Council recorded there were in fact six separate titles for this transaction. The Council not only had to assign the leasehold interest, it also had to grant access over different parts of the block of flats.
20. On 6 December, the Council served a counter notice requiring Mrs B to complete the transaction. It answered most of the solicitor’s concerns at this time. But an internal email on the Council’s files suggests the plan and title were not correct. On 18 December the Council had to contact the Land Registry because it had that day discovered the title document of one part of the site was not in order and may include part of the highway.
21. The Council transferred the file to an external solicitor. Mrs B’s solicitor chased the Council for an update on 9 January. It served a further Initial Notice of Delay and the subsequent Operative Notice of Delay on the Council on 20 February. The solicitor complained to the Council and asked it to reduce the purchase price in line with the notices served but it would not. The transaction was finally completed on 17 May 2019.
22. The delay in completing the sale meant Mrs B had to renew her mortgage offer, and her solicitor costs increased. She had to pay rent when she could have been paying her mortgage and she says the whole process was very stressful.

Was there fault by the Council causing injustice?

23. The Council has accepted it delayed, in producing the correct plan and proving ownership of the various interests to be transferred. The Council says Mrs B’s solicitor contributed to this by asking for a lease and for standard terms to be changed. However, the transaction could not have completed without the correct plan and title documents, and so any other amendments requested by Mrs B’s solicitor did not materially impact how long the transaction took. Also, the file documents that I have seen do not show Mrs B’s solicitor took too long to respond to the Council’s contact.
24. I have taken into account the site was unusually complicated, involving six separate proofs of title, and that there was an inaccuracy in one of these that the Land Registry had to attend to. However, the Council took six months from the time it referred the matter to its legal team to discover these issues. The Council was at fault. It took too long to prepare the correct legal documentation and prove title, and this delayed the transaction. It should have taken around six to eight weeks to complete the legal work required, and instead it took around 11 months.
25. The law sets out how to deal with delay and includes a means to remedy this by reducing the purchase price by the amount of rent paid during the period of delay. Mrs B’s solicitor served the correct notices as required and The Council was at fault when it did not respond to this or adjust the sale price to reflect that Mrs B paid rent for nine months longer than she should have done. This failure to respond to the solicitor’s requests for compensation was also fault by the Council.
26. Mrs B paid rent longer than she would otherwise had done because of the Council’s delay. Mrs B had to renew her mortgage offer and pursue matters with the Council and the Ombudsman.

Agreed action

27. The Council will, within one month of this decision,
• Apologise to Mrs B for its delays and failure to respond adequately to her solicitor’s correspondence.
• Pay Mrs B £300 in recognition of the time and trouble it put her to.
• Pay Mrs B an amount equivalent to rent payments made during the period of delay, representing the amount that would have been due under the statutory process.
• Review how it monitors these cases to make sure that delays are kept as short as possible. If there are delays, ensure to comply with its statutory duties.
• Share this decision with the relevant staff.

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Final decision

28. I have completed my investigation. There was fault by the Council causing injustice. The agreed action is sufficient to remedy the impact on Mrs B and to prevent future problems.

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Investigator's decision on behalf of the Ombudsman