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North Tyneside Metropolitan Borough Council (20 008 611)

Category : Housing > Council house sales and leaseholders

Decision : Upheld

Decision date : 07 May 2021

The Ombudsman's final decision:

Summary: The Council’s delay in processing Mr X’s Right to Buy application was fault. This caused Mr X some distress and inconvenience. The Council offered a suitable remedy to recognise the impact this had on him. It would have been reasonable for Mr X to have used the statutory delay notice procedure to get the rent he paid during periods of delay deducted from the purchase price.

The complaint

  1. Mr X is a secure Council tenant who applied to buy his home under the Right to Buy (RTB) scheme.
  2. He complained that the Council took far too long to process his application. It took about 13 months from the time he applied to completion. During this time Mr X continued to pay rent when he could have been paying the mortgage on the property instead. He was also put to time and trouble. He had to extend his mortgage offer due to the delay and he and his solicitor had to chase up the progress of his application.

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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. 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 spoken to Mr X and considered all the information he and the Council provided.
  2. I gave Mr X and the Council 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

The Right to Buy scheme

  1. Under the government’s Right to Buy scheme, a secure Council tenant can buy their home, if they meet qualifying criteria, at a lower price than the full market value. A discount is calculated based on the length of time they have been a tenant. The law governing the Right to Buy scheme is in the Housing Act 1985.
  2. The key stages in the Right to Buy process are:
  • A tenant applies to buy their property using form RTB1;
  • The council has four weeks to decide whether the applicant is eligible to buy the property and issue form RTB2;
  • If the tenant is eligible to buy the property, the council then has eight weeks to send the applicant a formal section 125 Notice (RTB4). This sets out the sale price and terms and conditions of sale;
  • If a council does not meet these timescales, the Housing Act 1985 gives the applicant the option of serving an initial Notice of Delay form (RTB6);
  • A council must then either progress the sale within a month or send a counter notice (RTB 7) to the tenant. The counter notice will explain what action the Council has already taken, or explain why it cannot progress the sale.
  • If the Council does not reply within a month the tenant can complete an “operative notice of delay” form (RTB 8). Once this notice is sent, a council may need to refund the rent the tenant has paid during the period of delay.
  • If the Council still does not act on the notices of delay, a tenant may take their dispute to the County Court under section 181 of the Act. The County Court may decide any question about the RTB scheme, other than the value of the property.
  1. The Ombudsman usually expects a tenant to use the statutory Notice of Delay procedure. It provides a remedy as any rent paid during a period of delay by a council is deducted from the purchase price. The procedure is publicised in information councils send to Right to Buy applicants and on the government’s Right to Buy website. Conveyancing solicitors should also be aware of the procedure and be able to advise applicants about it.

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What happened

  1. The Council’s records are incomplete so it could not provide a comprehensive timeline for the entire period from the date of Mr X’s RTB application to completion. The officer in the Legal Service who handled Mr X’s application left the Council in 2020 and his email account cannot be retrieved.
  2. The Council’s records show it received Mr X’s RTB1 application form on 20 May 2019. It sent a RTB2 form on 21 May admitting his right to buy his home. On 18 June 2019 the Council sent Mr X the Section 125 offer notice setting out the valuation of the property, his discount and the purchase price. All these stages were completed within required timescales.
  3. The Legal Service then received the RTB file and contacted Mr X’s solicitors in early August 2019.
  4. In early September 2019 the official copies of the register, title plan and transfer documentation were saved in the case file.
  5. There is no record of any further substantive action until mid-December 2019 when a transfer of title form was created and saved in the case file.
  1. In January 2020 Mr X’s solicitors made enquiries and sought the Council’s agreement to Mr X seeking a mortgage advance that exceeded the purchase price. An issue about an unadopted path at the front of the property was also investigated. There was further correspondence between the solicitor and Mr X’s solicitors in February.
  2. In March 2020 a different officer in the Legal Service took over the case.
  3. The sale of the property was completed on 13 July 2020 before the mortgage offer expired.
  4. Shortly before the completion date, Mr X’s mortgage adviser complained to the Council about unreasonable delay in processing the RTB application. The Head of Law & Governance replied. He accepted the transaction had not progressed as quickly as it should have done. He asked the mortgage adviser to convey his apologies to Mr X. He said the Council would contact Mr X directly, after the completion date, to discuss what steps it could take to remedy the impact of the delay.
  5. The Council did not contact Mr X again as promised. So Mr X followed this up a few months later by sending an email to the Head of Law and Governance in October 2020. This was not registered as a complaint under the Council’s complaints procedure.
  6. In email correspondence with the Head of Law & Governance, Mr X said he and his solicitor had discussed the option of seeking a rent rebate but their priority was to complete the purchase. He said they did not have time to apply for a rebate.
  7. In November 2020 the Head of Law & Governance replied to Mr X’s complaint about the delay in completing the transaction. He acknowledged there had been periods of avoidable delay and lack of communication. He understood this had caused Mr X some frustration and inconvenience. He offered £500 to recognise the impact this had on him. He did not agree to refund the rent Mr X had paid while he was waiting for the sale to go through. He referred to the statutory notice of delay procedure and said Mr X could have used this remedy to get rent he paid offset against the purchase price.

Information Mr X received about the RTB process

  1. The Council’s Right to Buy Team sends a letter and standard information pack to tenants who enquire about buying their homes. This includes the RTB1 form and information booklets. These booklets are also available at Customer Service Centres. 
  2. The “RTB Information Letter” sent to prospective purchasers states at Section 5:

“If at any step in the process you believe that the Council is causing delays in the sale of your property you can serve a delay notice on the Council.  This is called an RTB6.”

  1. The Council also sends tenants a copy of the government guidance document “Want to make your home your own?”. Page 17 gives guidance about what to do if the landlord delays. It informs tenants they could get a reduction in the sale price. It refers to a web page for more information about delay notices.
  2. The Council’s website also directs tenants towards independent advice on the Government’s Right to Buy website (www.righttobuy.gov.uk) which has information about contacting independent advisers and dealing with delays.
  3. Mr X told me he did not read all the information the Council sent about the RTB process. The records show his solicitor was involved from August 2019 at an early stage in the RTB application.
  4. Mr X told me his mortgage offer was extended once by six months and the sale was completed just before the extension expired. He did not pay any additional fees or charges to the mortgage lender. He found the delay stressful and frustrating. He worried he may not get an extension of the mortgage offer due to his age.

My analysis

  1. There was undue delay in processing Mr X’s RTB application. The Council accepts the service it provided fell below expected standards. That was fault.
  2. The delay clearly caused Mr X inconvenience and some distress. That was an injustice. His mortgage adviser and solicitor regularly contacted the Council to chase progress. The Council’s offer of £500 provides a suitable remedy for Mr X’s distress and this amount is in line with our published guidance on remedies.
  3. I considered Mr X’s claim that he lost out financially because he continued to pay rent when he could have been paying the mortgage instead. That may well be the case. He wants the Council to compensate by refunding the rent he paid in that period.
  4. However the Housing Act 1985 created a legal remedy for tenants to use in these circumstances. This is well publicised. So I had to consider whether it was reasonable to expect Mr X to have used the delay notice procedure to get the rent he paid during periods of delay deducted from the purchase price.
  5. The Council sent Mr X booklets which referred to the delay notice procedure and signposted him to other sources of advice. Although Mr X says he did not read all the booklets, buying a property is a major financial transaction so it is reasonable to expect him to have referred to the guidance. His solicitor was also involved in the transaction from August 2019. Mr X told the Head of Law & Governance that he and his solicitor had discussed the option of using the delay notice procedure but decided against it.
  6. On the facts of this case, I consider it would have been reasonable for Mr X or his solicitor to have used the statutory delay procedure. For this reason, I have not recommended that the Council pays Mr X an amount equivalent to the rent he paid during the periods when it delayed.
  7. The Council’s apology to Mr X and its offer of £500 provides a satisfactory remedy for the inconvenience and frustration Mr X experienced.

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Final decision

  1. I have completed the investigation and found the Council was at fault and this caused injustice to Mr X. The Council has offered a satisfactory remedy for Mr X’s distress.

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Investigator's decision on behalf of the Ombudsman

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