Decision : Not upheld
Decision date : 06 Jan 2021
The Ombudsman's final decision:
Summary: There is no fault in the Council cancelling Ms X’s Right to Buy application when it found evidence that she owned another property. The Council allowed Ms X to make a new application when the other property was no longer in her name.
- Ms X complains the Council delayed dealing with her Right to Buy application and then wrongly cancelled it.
The Ombudsman’s role and powers
- 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)
- 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)
- 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)
How I considered this complaint
- I considered Ms X’s complaint and asked the Council for information and considered what it said.
- Ms X could go to court to challenge the Council’s cancellation of her application. We have exercised discretion to consider the complaint because of Ms X’s circumstances.
- Ms X and the Council had an opportunity to comment on my draft decision. I considered any comments received before making a final decision.
What I found
The Right to Buy (RTB)
- When a tenant applies for the right to buy their council home, certain timescales apply. The Council has 4 weeks from receiving an initial application to say if it accepts the application. The Council then has eight weeks to make an offer. If the applicant thinks the offer is too high, she can, within 12 weeks, ask the Council to get an independent value from the District Valuer.
- The District Valuer’s decision is binding on the Council unless the applicant withdraws the application and later re-applies. In this case the process starts again.
- If the applicant thinks the Council is taking too long, she can send a notice of delay (RTB6). If the Council does not send a counter notice, the applicant can serve an operative notice of delay (RTB 8). Once the applicant does this the Council must treat the rent paid after the RTB 8 as an advance towards the purchase price. When the Council completes the sale, it must deduct from the purchase price all the rent treated as an advance payment.
- The Council carries out checks to ensure the RTB is not fraudulent and for money laundering.
- A person is only entitled to apply for the RTB if they are occupying the property as their only or principle home.
The Council’s complaint procedure
- The complaint procedure has two stages. At the first stage a manager will investigate and reply within 20 working days. At the second stage a more senior manager will reply within 20 working days.
- On 3 July 2018 Ms X gave the Council her RTB application. She wanted to buy her home just in her own name but said her son was giving her £17,725 toward the cost.
- The Council has not provided me with a copy of its letter to Ms X accepting the application. On 17 September 2018 the Council sent its offer letter to Ms X. It said its own valuer gave the house a market value of £100,000 and Ms X would get a 43% discount due to her time as a tenant.
- In early November 2018 Ms X asked the Council for a new valuation. The Council instructed the District Valuer on 9 November and on 13 December he provided a new value of 92,000. On 2 January 2019 the Council sent its revised offer letter to Ms X. With her discount Mrs X would now have to pay £52,225.
- Ms X instructed a solicitor and she paid the solicitor £200 to do the property searches.
- Ms X and her son also provided information the Council wanted. This included identity information for her son. The Council’s records say this was provided and accepted. Ms X’s son also provided proof he had the funds to give the money to his mother. This was a current bank statement showing he paid £200 a month into the account and in the previous three months he had made one withdrawal of £400. He had nearly £19,000 in the account. Ms X provided a letter showing she had a mortgage in principle for the rest of the cost.
- On 4 February 2019 Ms X’s solicitor asked the Council for the draft contract and supporting documents for the sale. The Council did not send the documents.
Ms X’s solicitor sent reminders to the Council on 20 February and 27 March.
- On 27 February 2019 Ms X gave the Council a copy of her mortgage offer, which was valid for 6 months.
- I asked the Council for the full records of its investigation of the application by its Fraud Team. It has provided very few records. The first is dated 21 March 2019 from a Fraud Officer to Housing Officers. This asked if Housing had rejected the RTB. If it had rejected it, the reasons for this so Fraud could close the case.
- On 1 April 2019 Ms X served an initial notice of delay on the Council.
- On 10 April the Council wrote to Ms X. It said her son’s current account showed no outgoings and the details in Ms X’s mortgage application did not match the credit check it had carried out. It said it had cancelled Ms X’s RTB application. On 11 April Ms X asked the Council to reconsider and for a copy of the documents the Council had.
- The Council replied on 25 April. It said Mrs X had not told it she had a mortgage on the house next door, so it was right to cancel her RTB.
- The credit checks and other records provided to me by the Council show that Ms X had a connection with the house next door, a rental property.
- On 4 May 2019 Ms X asked to go to the next stage with her complaint. She said she did not own next door and have any mortgages or loans. She sent the Council a copy of the land registry record for next door and her own credit check. The land registry records show her son bought next door in January 2019.
- The Council replied on 21 June 2019. It said having carried out further checks the Council accepted Ms X did not own next door and she had no mortgage commitments. It said there were no fraud issues It said there were inconstancies about her son’s ID and income, but this was not enough to deny her application. It said Ms X could make a new RTB application.
- Ms X made a new application on 24 June. The Council wrote to Ms X asking for proof of her residency dated within the last 3 months. It said if Ms X did not provide this within 7 days it would cancel her application.
- On 5 July 2019 the Fraud Team confirmed there were no fraud issues with the application.
- On 17 July the Council wrote to Ms X accepting her RTB. On 7 August the Council sent Ms X an offer letter valuing the house at £100,000.
- Ms X says by this time her mortgage offer had expired and she had to reapply. She also says the Council reversion to the original price means she had to reapply to the District Valuer.
- The Council says the date for the value of the property is the date of the application. It says it was too long between the first and second applications, so it asked Ms X to complete a new form.
- The Council sent its first offer letter in time and had to carry out fraud and money laundering checks. The Council is required to carry out such checks and so this is not fault.
- The Council’s checks revealed that Ms X had an interest in another property at the time she made her RTB application. Therefore, the property was not her only or principle home. Although the other property was later purchased by Ms X’s son this was after Ms X had made her application. The Council was entitled to cancel Ms X’s application and ask her to make a new one based on the fact she no longer owned the other property.
- It may be arguable that the property subject to the RTB application was Ms X’s “only or principle home” as the other property was rented out to a tenant when the application. However, it is not for the Ombudsman to interpret the law. That is a matter for the courts.
- The Council delayed in replying to Ms X’s stage two complaint. It should have done this in twenty working days, but it took 30 working days. This is only 10 working days longer than it should have taken and given the complexity of the complaint I do not consider this to be fault.
- In its response to Ms X’s complaint the Council said it accepted the other property was no longer in her name and that said “I uphold your appeal in relation to your right to buy and you can now submit a new form to buy your home if you still wish to do so”. The decision to “uphold” Ms X’s complaint is not based on any finding of fault with the Council’s action. Therefore, the Council’s response to Ms X’s complaint is flawed. The Council should have explained that Ms X was free to proceed with a new RTB application now she no longer owned the other property.
- There is no fault in the actions of the Council.
Investigator's decision on behalf of the Ombudsman