Summary: Ms B complains that the Council delayed in dealing with her purchase of her Council flat under the right to buy scheme. The Ombudsman finds the Council delayed in dealing with the process, failed to communicate properly with Ms B and failed to deduct an agreed amount from the purchase price on completion. The Council has agreed to apologise to Ms B and make a payment to her in recognition of the distress and inconvenience she suffered.

The complaint

1. Ms B complains that the Council delayed in dealing with her purchase of the leasehold interest of her council flat under the right to buy scheme. As a result, she had to pay additional legal and mortgage costs and pay rent when she should have been paying towards the purchase of the flat.

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The Ombudsman’s role and powers

2. We investigate complaints of injustice caused by ‘maladministration’ and ‘service failure’. I have used the word ‘fault’ to refer to these. We cannot question whether a council’s decision is right or wrong simply because the complainant disagrees with it. We must consider whether there was fault in the way the decision was reached. (Local Government Act 1974, section 34(3), as amended)
3. 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

4. I have considered all the information provided by Ms B, made enquiries of the Council and considered its comments and the documents it provided.
5. Ms 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

Legal and administrative background

6. Under the Government’s Right to Buy scheme, a secure social housing tenant can buy their home, if they meet qualifying criteria, at a lower price than market value. A discount is applied based on the length of time spent as a tenant. The law about Right to Buy is found in the Housing Act 1985. There is a strict procedure for applications:
• Once a council receives an application from a tenant to buy their property, it has four weeks to issue a notice confirming the applicant is eligible to buy it (RTB2);
• The Council has eight weeks to send the applicant a formal offer letter under Section 125 of the Act (RTB4);
• The tenant then has 12 weeks in which to decide whether to go ahead with the purchase;
• If a council fails to meet the timescales, the applicant can serve an ‘Initial Notice of Delay’ form (RTB6);
• A council can counter this by serving a counter notice (RTB7); and
• if the Council fails to respond to the RTB6 within a month, the applicant can send an ‘Operative Notice of Delay’ form (RTB8). Once this is sent, a council (as landlord) may need to refund rent paid during the period of delay.
7. 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

8. Ms B served an RTB6 on the Council and ultimately had the right to ask the court to remedy the delay. I have exercised discretion to investigate the complaint because the court may not intervene now the transaction is complete, and it would not have been reasonable to ask Ms B to postpone completion to allow the court to settle matters.

Key facts

9. In November 2017 Ms B and her grandmother, Mrs C, applied to buy Mrs C’s Council property. In December 2017 the Council sent Ms B and Mrs C the RTB2 and in February 2018 it sent them an offer notice. They accepted the offer in May 2018.
10. In June 2018 officers referred the file to the legal services department to complete the conveyancing. The legal department issued a sales pack to Ms B’s solicitors.
11. On 29 August 2018 Ms B’s solicitors provided the anti-money laundering (AML) documents requested by the Council. On 17 September 2018 the legal department referred the documents to the anti-fraud department for AML clearance.
12. In October 2018 the anti-fraud team told the legal department it had concerns because the applicants “who are pensioners and in receipt of full benefit have obtained a mortgage of £280,000 raises suspicion that a fraudulent application may have been submitted”. As a result, further checks were required via an external agency.
13. There was a delay in completing the checks because of a problem with the external website.
14. In December 2018 Ms B complained to the Council about the delay and in January she submitted an RTB6 initial notice of delay. The Council served a RTB7 counter notice. It denied holding up the purchase saying the application was currently being reviewed and further checks were being carried out.
15. In February 2019 the anti-fraud team contacted the legal department confirming the fraud investigation was concluded.
16. Ms B wrote to the Council saying her mortgage offer had expired and she wanted it to pay £495 to her mortgage broker so she could make a new mortgage application. She said she had also incurred additional legal fees because of the delays and wanted the Council to pay these.
17. In March 2019 Ms B wrote to the Council saying she could no longer obtain a mortgage because of a change in criteria by the only lender who was willing to accept a right to buy (RTB) application based solely on her income as her grandmother was elderly. She said the only way she could obtain a mortgage was if the Council agreed to remove Mrs C from the application so she could get a mortgage for the full amount or discount £29,500 from the purchase price to enable her to get a mortgage for a lesser amount. She also asked the Council to cover the extra legal fees and mortgage broker’s fees incurred because of the delay.
18. The legal team responded stating it could not offer any formal compensation but, as a goodwill gesture, would offer a reduction equating to 9 months’ rent which would be deducted from the amount required on completion.
19. Ms B responded saying she was willing to accept this provided the Council agreed to take Mrs C off the application.
20. Officers from the housing, legal and the anti-fraud departments met to discuss the matter in April 2019. Following this the legal department emailed the housing department stating that it would send a holding response to Ms B and in the meantime officers needed to establish that she met all the requirements in her own right to proceed with the RTB including the requirement to occupy the property as her main residence.
21. In June 2019 the legal department wrote to Ms B stating that, after careful consideration, the Council had agreed to allow her to proceed with the purchase without the tenant provided Mrs C signed a notice confirming she agreed. Mrs C signed the notice confirming she agreed to Ms B completing the application without her.
22. In July 2019 the legal department issued revised documentation to Ms B’s solicitors because of the change in purchaser.
23. In August 2019 Ms B’s solicitors told the legal department they were waiting for a revised mortgage offer. They requested an amendment to the lease claiming the purchase price was incorrect. They also requested that the lease was amended to include the rear garden of the property.
24. In September and October 2019 Ms B’s solicitors wrote to the legal department requesting a response. The legal department confirmed the file was being reviewed.
25. On 11 October 2019 Ms B wrote to the Council stating that her mortgage offer was due to expire shortly. Meantime, officers from the legal department discussed their concerns with the Director of legal that the Council had a duty of care towards Mrs C who was elderly and vulnerable so questions should be asked about whether her withdrawal from the RTB process may affect her status as a secure tenant and her welfare. Officers were also concerned that there was no evidence from the housing department that Ms B had been living at the property for the necessary 12 months before making the application. Officers decided Mrs C’s welfare should be safeguarded.
26. In November 2019 Ms B wrote to the Council informing it that her mortgage offer would expire in a month’s time. She also complained about the delay.
27. On 8 November 2019 the Council’s safeguarding team told the legal team that Mrs C was assessed as lacking capacity in April 2019 in relation to making decisions about her welfare and residency. So, when she signed the document withdrawing from the RTB process, her family was aware she did not have capacity. The legal department referred the matter to the anti-fraud department. The application was put on hold pending the outcome of the anti-fraud department’s investigation.
28. On 19 November 2019 the anti-fraud department confirmed that it was investigating the matter. The legal department wrote to the housing department to confirm that the matter was being put on hold pending the anti-fraud department’s investigation.
29. On 29 November 2019, having received further correspondence from Ms B, the legal department sent a response stating it would respond on 5 December 2019.
30. On 3 December 2019 the anti-fraud department wrote to the legal department confirming that, in terms of the RTB legislation and procedure, there were no issues. But no decision had yet been made on the safeguarding issue as it was waiting for information from social services.
31. On 12 December 2019 the anti-fraud department recommended the legal department refer the matter to the adult safeguarding team for further enquiries because “evidence to suggest that a vulnerable elderly person has been taken advantage of”. The legal team made the referral the same day.
32. On 19 December 2019 the legal team wrote to Ms B explaining that the reason for the delay was because it was investigating a safeguarding issue which had come to light.
33. In February 2020 Ms B wrote to the Council again complaining about the delay. She said the revised lease agreement had been with the Council since September 2019 and she heard nothing until December 2019 when she was informed about the safeguarding issue.
34. On 10 March 2020 the adult safeguarding team confirmed that a social worker had recently visited Mrs C and assessed her as lacking capacity with regard to making the decision whether to rent or buy her property. But, as capacity is time specific, social services could not confirm whether she had capacity in 2017 when the application was made. They recommended no further action.
35. On 16 March 2020 the legal department wrote to Ms B confirming the safeguarding investigation had concluded and the RTB application would continue.
36. On 17 April 2020 Ms B informed the legal department that Mrs C had died. The same day the legal department wrote to Ms B’s solicitors requesting various documents including AML documents. The anti-fraud team provided AML clearance on 24 April 2020 and on 4 May 2020 the purchase was completed.

Analysis

37. Ms B is unhappy with the length of time the process took and says the Council should refund six months’ rent together with the additional legal fees she incurred as a result of the delay (£1135) and the additional mortgage broker’s fees which she incurred as a result of having to apply for a new mortgage (£300).
38. The Council accepts the process was lengthy but says this was because it had to complete additional checks in October 2018 due to concerns raised by the anti-fraud team about the mortgage and a safeguarding investigation following the removal of Mrs C from the application in June 2019.
39. There are no grounds to criticise the Council for completing additional checks on the mortgage. However, these checks took longer than necessary. The case was referred to the anti-fraud department in September 2018. The fraud investigation was not concluded until February 2019. The delay in completing the investigation was fault and caused Ms B a significant injustice. She suffered distress and her mortgage offer expired resulting in additional costs.
40. In March 2019 Ms B asked the Council to remove Mrs C from the application or reduce the purchase price by £29,500 so she could get a mortgage. She also asked it to cover the additional legal fees and mortgage broker’s fees she had incurred because of the delay. The Council said it could not offer any formal compensation but, as a goodwill gesture, would deduct nine months’ rent from the amount required on completion. Ms B agreed to accept this provided the Council agreed to take Mrs C of the application.
41. At the time, Ms B’s rent was £116.95 per week which equates to £506.78 per month. The Council should therefore have deducted £4561.05 from the purchase price as agreed. It did not do so. This was fault and caused Ms B a significant injustice.
42. The Council says it cannot rebate the rent unless the tenant serves an RTB6 initial notice of delay followed by an RTB8 operative notice of delay. It says that Ms B did not serve an RTB8 to claim the rent.
43. I do not consider it relevant that Ms B did not serve an RTB8. The Council offered to deduct nine months’ rent from the purchase price on completion as “a goodwill gesture”. It did not state that this would only be done if Ms B served an RTB8.
44. I do not criticise the Council for completing a safeguarding investigation in respect of Mrs C. However, it agreed in June 2019 that Ms B could proceed with the purchase without Mrs C provided she signed a notice agreeing to this. It was not until October 2019 that the legal department raised concerns about Mrs C’s welfare. It should have considered this issue before agreeing to remove Mrs C from the application.
45. It then took six months to complete the safeguarding investigation. This was excessive. The Council should have been able to complete the investigation in half that time. The delay caused Ms B further distress and frustration.
46. The delay was exacerbated by the fact that Ms B was not aware what was happening. The Council did not correspond with her or her solicitors after issuing revised documentation on 8 July 2019 until 8 October 2019 when it explained the file was being reviewed. This was despite several chasing letters from Ms B’s solicitors.
47. In October 2019 Ms B and her solicitors informed the Council that the mortgage offer was due to expire and asked it to confirm a completion date. It did not respond until 29 November 2019 when it sent a holding letter stating a response would be provided on 5 December 2019. This was not forthcoming until 19 December 2019 when the Council informed Ms B it was investigating a safeguarding issue. On 16 March 2020 the legal department informed Ms B that the safeguarding investigation had finished and the application would proceed.
48. The delays in the process and the Council’s poor communication caused Ms B distress and inconvenience. She was also put to time and trouble in chasing the Council and in having to apply for a new mortgage. She incurred additional legal costs and mortgage broker’s costs.
49. I do not consider it appropriate to recommend the Council refunds Ms B’s additional costs because I cannot establish what proportion of these costs resulted from the legitimate delays in completing necessary checks and what proportion was due to excessive delay.
50. I consider the Council’s offer to deduct nine months’ rent from the purchase price in March 2019 was generous. I consider that amount is sufficient to cover the delays for both the period October 2018 to February 2019 and the period July 2019 to March 2020.

Agreed action

51. The Council has agreed that, within one month, it will apologise to Ms B for the fault identified above and pay her £4561.05.

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Final decision

52. I find the Council was at fault in that it:
• delayed in processing Ms B’s right to buy application;
• failed to keep Ms B informed about progress; and
• failed to deduct £4561.05 from the purchase price as agreed in March 2019.
53. I have completed my investigation on the basis that the Council has agreed to implement the recommended remedy.

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Investigator's decision on behalf of the Ombudsman