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Newcastle upon Tyne City Council (19 017 430)

Category : Housing > Council house sales and leaseholders

Decision : Upheld

Decision date : 15 Mar 2021

The Ombudsman's final decision:

Summary: The Council was at fault for giving Ms X incorrect information when she purchased her house from the Council in 2004. Ms X only became aware of this in 2018 when she tried to sell the house. The Council withheld important information from Ms X which caused her significant distress. The Council has agreed to remedy Ms X’s injustice by apologising and paying her £300 for the avoidable distress arising from the fault and £300 for the time and trouble she has experienced.

The complaint

  1. Ms X complains the Council gave her incorrect information, particularly about defects in the structure of her house, and an unjustifiably high valuation regarding her property when she went through the Right to Buy (RTB) process in 2004. Ms X also complains the Council has not offered her enough help in remedying the effect of its failings.

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The Ombudsman’s role and powers

  1. 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)
  2. We cannot investigate late complaints unless we decide there are good reasons. Late complaints are when someone takes more than 12 months to complain to us about something a council has done. (Local Government Act 1974, sections 26B and 34D, as amended)
  3. A substantial part of Ms X’s complaint relates to events which took place in 2004. We are prepared to look at this part of her complaint because Ms X was only aware of the mistake in 2018 and has been pursing it continuously with the Council since then.
  4. 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

  1. I have considered Ms X’s complaint and have spoken to her about it.
  2. I have also considered the Council’s response to Ms X and the information sent in response to my enquiries.
  3. Ms X 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

Background

Defective properties

  1. By the 1980s, some types of Council housing were considered structurally defective. The law allowed certain types of home to be designated ‘defective.’ These included some houses built by a company called Airey
  2. Airey designed two types of housing ‘Airey Duo-slab’ and ‘Airey’ properties.
    • ‘Airey Duo-slab - these properties have cavity walls of clinker precast concrete slabs secured to in situ poured concrete columns at four feet (1220) centres. They were not designated as defective under the Housing Defects Act. In Newcastle, work to this type of property involved modernisation, rendering and decoration of exterior brickwork between 1986 and 1988.
    • ‘Airey’- these properties were post-war ‘system built’ concrete houses constructed using concrete columns, pitched roofs with a tile covering, gable ends board finish or tile hung. They were designated as defective under the 1985 Housing Act however Y undertook work to its Airey properties which means they are no longer classed as defective. The work that was carried out involved a system brick wrap around which made the existing columns redundant and changed the appearance to be that of a traditionally built home.
  3. The law allowed some people who had unwittingly bought ‘defective’ homes from councils to receive help with repairs costs or to have their houses bought back by the councils. (Housing Defects Act 1984 and Housing Act 1985, part XVI)
  4. The repairs and ‘buyback’ schemes were only for people who bought their homes before September 1983 for the type of home relevant to this complaint. Owners had to apply by 1994. The schemes do not apply to Ms X, who bought her home in 2004. The Council now has a discretionary ‘buyback’ scheme.

What happened

Events in 2004

  1. Ms X used to be a Council tenant. She bought her house from the Council under the ‘right to buy’ in 2004. At that time, the Council told Ms X the property had been built in the 1950s and was free of defects.
  2. In response to my enquiries, the Council explained that, due to limited records back in 2004, the information was not available for it to provide Ms X with more detail of the construction of her home within her offer of sale.
  3. The Council went on to say that right to buy sales are carried out on valuations only and although the Council does endeavour to provide as much information as possible regarding structural defects, it could only rely on the information held at the time.
  4. I have seen a copy of Ms X’s offer of sale which states the following (emphasis replicated from the original offer of sale):

‘These are structural defects KNOWN to the Council and should not be relied upon as a warranty as to the full extent of structural defects. I advise you to have an independent survey carried out.’

  1. Ms X did not have an independent survey carried out. She said she thought because she was buying from the Council, they would be open and transparent and would not be concealing anything.

Ms X’s concerns about her property

  1. In recent years Ms X had difficulty selling her home. She states several prospective buyers pulled out after getting surveys because the survey results prevented them getting mortgages. Ms X states this made her wonder if her property was defective.
  2. After further research, Ms X took the view her property was built by Airey using non-traditional construction methods after World War Two ended in 1945. That is one of the types of property designated as defective.
  3. In 2018, Ms X raised her concerns with the Council. From the evidence I have seen, the Council did not give Ms X a straightforward answer as to when her property was built, and the type of construction used. The only reference I have seen from this time which refers to the construction type, is in a letter from the Council to Ms X’s MP in October 2018. This said, the property was recorded as a traditional build, but a recent check found it may actually be of Duo-slab construction.
  4. In January 2019, Ms X asks the Council to begin the buyback process for her house. The Council agrees to waive the £100 administration fee, given Ms X’s circumstances.

The Council’s February 2019 survey

  1. In February 2019, the Council conducted a survey of Ms X’s property. It said this was carried out as part of the buyback assessment and is normally an internal document only.
  2. The survey report concluded the property was built in 1924 and was an Airey Duo slab construction. As part of my enquiries, I asked the Council how the survey could pinpoint the year. In response, the Council confirmed the survey stated 1924 as this was the year of the Building Act. It said although it could not confirm it was exactly this year, it was around that time as many properties in the area were built then.
  3. The Council confirmed that because Ms X’s property is of Airey Duo-slab construction, it is not, and never has been classified as being defective.
  4. Ms X asked for a copy of the survey report on 24 April 2019. In response to my enquiries, the Council said it believed it had been sent it to her shortly after her request. From the evidence I have seen, Ms X did not receive a copy of this report from the Council despite repeatedly asking for it. Ms X eventually received it from LGSCO after she had complained to us. The Council apologised for not sending it to her.
  5. Ms X said, if she had seen a copy of the report at the time the Council made an offer to buy back her property, she would have put forward points that may have improved the Council’s offer.

The Council’s buyback offer

  1. In May 2019, the Council offered Ms X £75,000 to buy back her property. Ms X said this was £40,000 below the market value and did not accept the offer. Ms X asked the Council for the information she believed the Council was withholding about her property. Over the following 4 months, Ms X chased the Council for a response.
  2. In September, the Council wrote to Ms X to request the survey information from the purchasers who have subsequently withdrawn. The Council did not provide any further information about Ms X’s house.
  3. Since Ms X took her complaint to the Ombudsman, the Council has offered to buyback her property for £76,000. Ms X still considers this to be an unacceptable offer, below the market value of the property.

My findings

2004 sale

  1. The Council was at fault in 2004 for selling Ms X her home under the Right to Buy scheme based on incorrect information about the property’s age or construction type. However, the Council did encourage Ms X to have a buildings survey undertaken at the time which she did not do.
  2. I do not consider the fault to have caused Ms X a significant injustice. This is because it was sold to her as a 1950 traditional build with no known defects, and although the house is now known to be a 1924 Duo-slab non-traditional build, it still has no known defects.

Buyback offer

  1. I do not consider the Council to be at fault for its offer to buy back Ms X’s property at less than market value. This is a discretionary policy, so it seems the Council is entitled to set its own terms for the offers it makes.

Withholding the survey report

  1. I do however consider the Council to at fault for withholding information from Ms X. The Council now says it thought it had sent the survey report to Ms X when she requested in in 2019 even though Ms X repeatedly told the Council she did not have it.
  2. We are unlikely to be able to say precisely what difference it might have made to Ms X’s buyback negotiations in 2019 had the Council supplied the report sooner. However, the uncertainty and sense of missed opportunity about whether there might have been a better outcome sooner is a significant injustice to Ms X. The impact the situation has had on Ms X’s physical and mental health has been reflected in my recommended remedy payment.

Agreed action

  1. Within 4 weeks of my final decision, the Council has agreed to:
      1. Apologise to Ms X for withholding the survey report at the time of the Council’s buy back offer;
      2. Pay Ms X £300 for the time and trouble it has taken her to pursue the complaint.
      3. Pay Ms X £300 for the avoidable distress arising from the fault.

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Final decision

  1. I have upheld Ms X’s complaint. The Council was at fault for providing incorrect information when Ms bought her house. It is also at fault for failing to share the correct information with her when it offered to buy back her house. This caused her a significant injustice.

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Investigator's decision on behalf of the Ombudsman

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