Privacy settings

LGO logogram

Review your privacy settings

Required cookies

These cookies enable the website to function properly. You can only disable these by changing your browser preferences, but this will affect how the website performs.

View required cookies

Analytical cookies

Google Analytics cookies help us improve the performance of the website by understanding how visitors use the site.
We recommend you set these 'ON'.

View analytical cookies

In using Google Analytics, we do not collect or store personal information that could identify you (for example your name or address). We do not allow Google to use or share our analytics data. Google has developed a tool to help you opt out of Google Analytics cookies.

Rotherham Metropolitan Borough Council (20 005 421)

Category : Housing > Council house sales and leaseholders

Decision : Upheld

Decision date : 04 May 2021

The Ombudsman's final decision:

Summary: Mr Y complains about the process followed by the Council when he applied to purchase his home under the Right to Buy scheme. The Council has already found fault causing injustice and offered a total financial payment of £1,200 for distress, time and trouble and some quantifiable loss. We find this is a suitable remedy for the personal injustice Mr Y suffered. However, the Council will also remind its officers about the statutory delay process and amend any relevant template letters to ensure they accurately reflect the legislation.

The complaint

  1. The complainant, Mr Y, complains about the Council’s handling of his ‘Right to Buy’ application. In particular, he complains about the avoidable delay caused by the Council’s failure to register the land when it first acquired the property from the housing developer. Mr Y seeks reimbursement for the financial impact arising from the Council’s errors.

Back to top

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. 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)

Back to top

How I considered this complaint

  1. During my investigation I discussed the complaint with Mr Y over email, and gave him the opportunity to discuss matters by telephone.
  2. I made enquiries of the Council and considered its response.
  3. I consulted the relevant law and guidance around the ‘Right to Buy’ process, cited where necessary in this statement.
  4. I issued a draft decision statement and gave Mr Y and the Council an opportunity to comment. I considered any comments received before making a final decision.

Back to top

What I found

Right to Buy

  1. The ‘Right to Buy’ (RTB) refers to rights granted under the Housing Act 1985 (as amended) to tenants of social landlords, including councils, to buy their home at a discount provided they meet certain criteria.
  2. Under the scheme, a tenant receives a discount on the property value based on the time they have been a tenant. There is a maximum discount.
  3. There is a strict procedure for RTB applications:
        1. The process begins with completion of an application form. On receiving the application, the Council must either accept or decline the application within four weeks.
        2. If accepted, the Council must make an offer called a ‘Section 125 Notice’ within eight weeks of accepting the application for a freehold property, or twelve weeks for a leasehold residence. The offer will set out the price of the property, the years of tenancy and the discount applied.
        3. The applicant has up to twelve weeks to accept the offer. If the applicant fails to respond, the Council will issue a reminder giving a further 28 days to reply. If the applicant does not accept, the Council may issue a notice to ‘drop’ the offer. The applicant must then re-apply if they later want to buy.
        4. Any disagreement with the price can be appealed within three months of the offer, via an independent valuation by the District Valuer. The applicant then has twelve weeks to either accept the valuation, issued via a ‘Section 128 Notice’, or withdraw from the sale.
        5. If either party disagree with the independent valuation, they may appeal to the District Valuer within 28 days of the S128 Notice.
        6. Once the applicant accepts an offer, the Council may send a ‘First Notice to Complete’ which gives the applicant 56 days in which to complete the sale.
        7. If the sale does not complete within 56 days, the Council may issue a ‘Final Notice to Complete' allowing a further 56 days, or longer if specified. If the applicant does not complete the sale within the timescales, the Council may cancel the application.
  4. The Ombudsman can investigate complaints about delay in the process. For example, if the Council has delayed in amending plans when there was clearly a mistake. This may arise when there are disputes over boundaries. The Ombudsman may uphold a complaint where it is evident the Council took too long to resolve any such disputes.
  5. However, when a council delays a sale, the applicant can complete a ‘Notice of Delay’ (RTB6) form and issue it to the Council. If the Council fails to take action within one month, or does not serve a counter notice, the applicant may serve an ‘Operative Notice of Delay’ (RTB8) form. After serving this, the sale price may be reduced by the amount of rent paid during the period of delay. We expect complainants to have used this process before we investigate a complaint.
  6. As described above, there are set timescales for certain parts of the RTB process, and an applicant can serve an RTB6 if those timescales lapse. The guidance ‘Right to Buy: a guide for Local Authorities’ also advises, “if the tenant decides to go ahead you [the Council] have to complete the sale of the property as soon as all the details have been settled. There is no set time limit for this, but the tenant can use the delay procedure if they think your delays are generally holding up the purchase”.
  7. Once the applicant serves an RTB8 notice, the guidance says “… rent paid during the delay period will be treated as an advance payment towards the RTB purchase price. This does not happen automatically; the tenant must continue to pay rent and any amount relevant to the delay will be deducted when the sale is completed…. The refund is calculated from the date of their operative notice of delay (RTB8) and ends when the delayed action is taken”.

What happened

  1. In June 2018, the Council acquired the house, which Mr Y now owns, from a housing developer as part of a social housing scheme. Before purchasing the house, Mr Y and his partner were the tenants. Mr Y applied in February 2019 to purchase the house through the ‘Right to Buy’ (RTB) scheme.
  2. The Council advised Mr Y that it could not process his application. At first, the Council believed the form was not completed correctly, but it later turned out the discrepancy was due to wrong information held in the Council’s records. The Council asked Mr Y to resubmit a new application, which he did on 28 February 2019.
  3. The Council accepted the application and issued a S124 Notice on 26 March 2019 and within the statutory four-week limit. The Council then issued the S125 Notice on 7 May 2019 and within the statutory timescales. Mr Y accepted the offer on 23 May 2019. The Council requested further checks on 30 May 2019 to proceed with the sale.
  4. On 1 August 2019 Mr Y called the Council to register a formal complaint due to the alleged loss of a mortgage offer letter submitted with his proof of income. Mr Y also expressed concerns about general delay in the RTB process. The Council responded soon after, but it did not uphold the complaint. It advised Mr Y, “If you believe the Council has purposefully delayed your Right to Buy application, you will need to serve an official notice of delay to which we will officially respond. However, please note these notices cannot be back dated. However, on review the Right to Buy team has turned around this part of the process within 17 working days, including the periods in which we were waiting for information from you”.
  5. The Council issued an RTB4 letter on 29 August 2019, instructing completion of the sale. However, shortly after issuing the notice, the Council discovered on 3 September 2019 that Mr Y’s home was not correctly registered with the Land Registry. Despite this, Mr Y says he received initial assurances from the Council that contracts would exchange as planned. After resolving various issues, the land was eventually registered on 2 June 2020.
  6. Concurrent to the Land Registry issues, Mr Y’s partner, who also resides with him, raised concerns about the boundary lines shown on the plans submitted by the Council on 22 October 2019. The Council issued amended plans two days later, but Mr Y’s partner maintained her view that they were inaccurate. All parties agreed on new plans on 29 October 2019.
  7. Mr Y spoke with the Council to express his concerns and submitted an online complaint on 17 November 2019 due to the delay caused by the failure to register the land. Shortly after, Mr Y’s conveyancing solicitor contacted the Council to raise six queries. Mr Y says his solicitor issued these queries to expedite the process in readiness for the eventual completion of the purchase.
  8. The Council issued a response to Mr Y’s complaint on 16 December 2019. It partially upheld the complaint because, “… I accept the Council should have resolved the title issue at a much earlier stage, even before you became a tenant”. The Council went on to say, “as your application is at the final, legal, stage of the Right to Buy process, there are no statutory timescales for the Council to meet; meaning there is no legislative action you can take to stop rent from being applied to your tenancy. And, because the delay is a consequence of a preceding legal issue, and not a Right to Buy procedural issue (how the Council has processed your application), the legislation around the Right to Buy would not have applied anyway”.
  9. Dissatisfied with the Council’s response, Mr Y served an RTB6 Notice of Delay on 14 January 2020.
  10. When the Council failed to respond to the RTB6, Mr Y served an RTB8 dated 28 February 2020. The Council accepted the RTB8, confirming, “this means that the final purchase price of your property will be reduced by the amount of any rent paid after 25 February 2020; subject to no further delays being caused by actions outside of the Council’s control”.
  11. Despite successfully challenging the delay via the statutory process, Mr Y remained dissatisfied because he felt there were additional financial costs arising from the Council’s delay. He raised a complaint at the second stage of the Council’s complaints procedure. In summary, the Council said in its response:
    • The delay in registering the land is a service failure and injustice arose when the land registration created delay in completion of the sale.
    • Mr Y has suggested two dates when, in his view, the Council could have reasonably completed the sale: 3 September 2019 and 29 October 2019. The Council considered the first date was unreasonable because legal representatives on both sides needed time to complete documentation. Furthermore, Mr Y’s partner challenged plans until 29 October.
    • Mr Y’s legal representatives submitted enquiries on 20 November 2019. This shows they were not ready to complete and reasonable time was needed to resolve those enquiries. Mr Y’s partner also raised subsequent issues on 28 January 2020 regarding parking bays.
    • The Council considers the earliest reasonable date for completion would be 6 January 2020. This is after taking account of legal enquiries and allowing two weeks for resolution of a parking issue.
    • The Council has calculated the difference between the mortgage Mr Y would have paid during this period, against his weekly rent. Mr Y’s weekly rent was £83.07. Based on the date of 6 January, any potential loss suffered by Mr Y would be for the seven weeks leading to the RTB8 on 25 January 2020. The Council asked for Mr Y’s mortgage details to undertake the calculations, but they were not provided. Mr Y has since explained that his rent payments were marginally lower than his current mortgage payments.
    • The Council accepts that Mr Y made additional efforts to progress matters, causing him avoidable time and trouble, which it agreed to remedy with a payment of £250 and an apology.
  12. Mr Y said the remedy offered by the Council barely covered the time he took from work to resolve the issues, and the fee he paid to secure a second mortgage. He raised a complaint at the third and final stage of the Council’s process. A panel of officers investigated the complaint, and unanimously concluded:
    • To uphold Mr Y’s complaint. Although the RTB procedure was compliant with the statutory timescales, the panel could not ignore “the catalogue of errors”. The panel listed these as: the failure to register the land, the time taken to resolve the registration, refuted advice given by officers, delays in the legal process and delays in the complaints process.
    • Mr Y should receive recompense for the seven-week period between 6 January 2020 and 25 February 2020 if Mr Y can provide evidence to show his mortgage payments are less than his rent payments.
    • Mr Y should receive a £1000 payment for distress, time and trouble and a further £200 for the second mortgage valuation fee.
  13. Mr Y remained dissatisfied with the remedy provided by the Council. He said the remedy offered did not reflect the losses he sustained. Mr Y subsequently approached the Ombudsman for an impartial review. In his complaint, Mr Y explained his view that the rent reimbursement, awarded via the RTB6, should be backdated to October 2019.
  14. Mr Y also explains the remedy offered by the Council does not adequately reimburse him for the lost opportunity to begin repaying his mortgage at an earlier date, which would have reduced his overall term and increased his equity.

Remedy for injustice caused by fault

  1. The government has set out in legislation a statutory process for applicants to challenge delay in the RTB process and seek financial redress in the form of rent reimbursement. This is deducted from the purchase price of the property on completion of the sale.
  2. The purpose of compensation awarded via the statutory scheme is two-fold: to ensure that tenants are not paying high rent payments for longer than necessary due to delay, and so they can begin making mortgage payments without delay to reduce the mortgage term and increase equity in the property.
  3. Mr Y has already benefited from the statutory scheme because his RTB8 removed any rent liability from 25 February 2020 until completion of the sale on 4 September 2020. Mr Y argues this should be backdated to October 2019. RTB forms cannot be backdated. This is something the Ombudsman has no jurisdiction to change. However, we can consider whether service failure by a council has created a lost opportunity which in turn causes financial loss.
  4. In this case, the evidence shows that Mr Y was advised on 9 August 2019 that there was a statutory delay process to challenge alleged delay. Mr Y chose not to submit a notice at this time because he was not yet aware of the land registration issues. Mr Y again enquired about delays in November. At this point, the Council wrongly advised Mr Y that he was unable to submit a notice of delay because the Council had already met the statutory timescales. This information is incorrect, because the legislation, guidance and RTB6 form make clear that applicants can challenge delay during any part of the RTB process.
  5. I therefore find fault in the Council’s advice which meant that Mr Y was misadvised in December 2019 and prevented from submitting an RTB6. The Council would have four weeks to respond or challenge any such notice. It did not respond to the notice which Mr Y served in January, so on balance I find the Council would have unlikely challenged or responded to one served in December.
  6. Taking this into account, I find the starting point for rent reimbursement should be 16 January 2020. This is based on Mr Y expressing his wish to challenge the delay on 17 November, which was followed by the Council’s complaint response on 16 December. This is the point at which I consider the Council should have provided advice about the statutory delay process. Allowing four weeks for the Council to respond to an RTB6 takes the earliest date to 16 January.
  7. The evidence shows the Council advised Mr Y in early August of his statutory right to challenge delay. Mr Y is correct to point out that any notices served in August could not have provided remedy for the delay later claimed in October. However, it is my view the advice provided in August meant that Mr Y was aware and able to use his appeal rights when he received notification of the land registration issues in October. For the reasons explained in paragraph 12 of this statement, I have not considered any delay claimed from October. This is because Mr Y had a window of opportunity to submit an appeal until the Council misadvised him in December.
  8. The rent paid by Mr Y between 16 January and 25 February 2020 amounts to £456.88. This is the amount I would have recommended the Council pay to Mr Y to put him back in the position he would have been, were it not for the fault identified in this statement. However, I am mindful the Council has already paid £1000 to Mr Y for “distress, time and trouble”. This is at the top end of the scale suggested in the Ombudsman’s ‘Guidance for Remedies’ and is more than what I would have recommended for the distress caused by fault in this case.
  9. I find Mr Y has already received a suitable and proportionate financial remedy for the delay caused by fault. If this case had been passed to me without a remedy already agreed, I would have recommended a time and trouble payment of £500, plus £456.88 rent reimbursement and £200 for the quantifiable loss caused by mortgage fees. Mr Y has received more than this and so I have not asked the Council to pay anything further.
  10. I appreciate Mr Y may be disappointed with my findings because he claims lost equity arising from ten months of delay, coupled with loss of earnings and lost time. But Mr Y has not provided evidence to support any other claims for quantifiable loss, and so I have not asked the Council to pay anything over and above the time and trouble payment already offered. Furthermore, the rent repayment remedies the impact to Mr Y’s mortgage because the Council deducted £1825.75 from the purchase price of the property.
  11. However, to help ensure the Council does not misadvise future applicants, it has agreed to remind officers dealing with RTB applications about the statutory delay process. The Council will also ensure the wording in any template letters it uses is correct and reflective of the legislation.

Back to top

Agreed action

  1. Within six weeks of my final decision, the Council will provide evidence to the Ombudsman that it has reminded officers dealing with RTB applications about the statutory delay process. The Council will also ensure the wording in any template letters it uses is correct and reflective of the legislation.

Back to top

Final decision

  1. We have completed our investigation with a finding of fault causing injustice. The remedy already offered by the Council is a suitable settlement for the personal injustice to Mr Y, however the Council will also implement the additional action I have recommended to prevent any wider injustice caused by fault.

Back to top

Investigator's decision on behalf of the Ombudsman

Print this page