London Borough of Barnet (24 000 465)
Category : Housing > Council house sales and leaseholders
Decision : Upheld
Decision date : 30 Jul 2024
The Ombudsman's final decision:
Summary: The Council delayed the purchase of Ms B’s property during the Right to Buy (RTB) process. We have found fault by the Council in the way it delayed the process. Because of the delay, Ms B suffered distress, inconvenience and uncertainty. The Council will apologise for the delays, provide a symbolic payment and refund the additional conveyancing fees caused by the delay.
The complaint
- Ms B complains the Council delayed the purchase of her property during the Right to Buy process. She says because of this, she has suffered a financial loss.
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)
- When considering complaints, we make findings based on the balance of probabilities. This means that we look at the available relevant evidence and decide what was more likely to have happened.
- If we are satisfied with an organisation’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)
What I have and have not investigated
- I have investigated the part of Ms B’s complaint about how the Council delayed the purchase of Ms B’s property during the Right to Buy process.
- I have not investigated any reference to ongoing issues or events after 28 May 2024, the date of the Council’s stage two complaint response. This is because the Council has not had the opportunity to consider a complaint about any issues arising after this date. If Ms B is unhappy with anything past this date, she should raise a complaint with the Council first. Once the Council has considered the complaint and has issued a final response, she may then refer the matter to us to consider as a new separate complaint.
How I considered this complaint
- I have considered Ms B’s complaint and the documents she has provided.
- I have considered the documents the Council has provided.
- Ms B and the Council have had an opportunity to comment on my draft decision. I considered their comments before making this final decision.
What I found
- 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.
- 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 (RTB7) 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 (RTB8). 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, which can be determined by the District Valuer.
- 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 sent to RTB applicants and on the Government’s RTB website. Conveyancing solicitors should also be aware of the procedure and be able to advise applicants about it.
What happened
- This is a summary of events, outlining key facts and does not cover everything that has occurred in this case.
- In 2021 Ms B applied to the Council to buy the remaining 50 percent of her shared ownership one bedroom flat under the Right to Buy scheme.
- In January 2022 Ms B accepted the Council’s offer and returned the section 125 form to the Council. Around the same time, she asked the Council to check its insurers held the correct details for her property, as the building insurance amount contained in the offer pack was based on a two bedroom flat.
- The Council told Ms B a few days later it had the property listed as having two bedrooms and it would check historical internal plans to confirm this.
- Ms B chased the Council for an update many times. The Council told her in late May 2022 it expected to send the draft lease to her within the next two weeks.
- Ms B served the Council an initial notice of delay form (RTB6) in early November 2022 and the Council sent her a counter notice (RTB7).
- In January 2023 the Council told Ms B the insurance team had the property listed as having two bedrooms and the valuation also stated it had two bedrooms. It said as the number of bedrooms was not stated within the lease itself, the issue did not affect the purchase and she should contact the insurance team directly if she wished to contest the amount of building insurance.
- Ms B asked the Council to see a copy of the valuation report. The Council told her it could not share the valuation document as it was for internal use only.
- In late March 2023 Ms B chased the Council for an update. She served the Council an initial notice of delay form (RTB6) a week later.
- In April 2023 Ms B raised a complaint with the Council about her property being listed as having two bedrooms and the lack of communication about this. The Council sent her a counter notice (RTB7) in response to her notice of delay form (RTB6).
- In June 2023 the Council sent a stage one complaint response to Ms B. The Council’s surveyor also visited the property and confirmed with the Council the property had one bedroom.
- In July 2023 Ms B escalated her complaint to stage two of the Council’s complaints procedure.
- The Council sent Ms B a stage two complaint response in August 2023. It upheld the complaint and explained it did not carry out a physical valuation of the property due to COVID restrictions. It confirmed it carried out the valuation on the assumption the property had two bedrooms. It apologised for its systems being incorrect and said it would arrange for an updated valuation which should be dated the same as the previous valuation. It told Ms B it would then send her an amended offer to consider. The Council signposted Ms B to the Housing Ombudsman in its complaint response.
- In late September 2023 Ms B contacted the Council as she still had not received the amended offer.
- In early October 2023 the Council sent Ms B the amended offer and Ms B accepted it. The Council confirmed receipt of the accepted offer and told Ms B it would progress this.
- In April 2024 Ms B complained to the Council about it delaying the purchase of her property. She told the Council she wanted:
- A refund of the rent payments she had paid since March 2022, when the sale should have completed;
- The Right to Buy discount repayment period backdating to March 2022 when the sale should have completed;
- A refund of the additional conveyancing fees she had incurred due to the delays;
- A refund of the building insurance overpayments as she had been paying a higher premium included in her service charge due to the property being incorrectly listed as having two bedrooms;
- A payment for distress and inconvenience.
- The Council sent Ms B a stage one complaint response. Ms B escalated the complaint to stage two of the Council’s complaint procedure.
- In May 2024 the Council sent Ms B a stage two complaint response. It explained:
- The delay was due to the valuation issues and that the issues were not resolved as timely as it had expected. It told Ms B it was looking at the process to ensure it would be improved in future;
- It had received confirmation from its legal team the amended draft lease was sent to Ms B’s solicitors on 17 May 2024;
- It had issued counter notices (RTB7) to Ms B’s initial notices of delay (RTB6);
- The terms of selling the property would be set out in the lease and it was not able to backdate the completion date;
- It is offering Ms B a payment of £630 for the difference in building insurance she paid in error;
- It is offering Ms B a payment of £250 for time and distress;
- If Ms B sends it an itemised list of the additional conveyancing fees it will consider a refund.
Analysis
- There was undue delay during the Right to Buy procedure. The Council sent Ms B an incorrect offer based on a two bedroom flat. Ms B’s flat has one bedroom. This was fault. It then took the Council 18 months – from when Ms B queried this with the Council in early 2022, to August 2023 when it sent Ms B its first stage two complaint response – to admit its error with the original offer. It took a further two months to send Ms B the amended offer. This was fault and the Council accepts the service it provided fell below expected standards.
- The delay caused Ms B inconvenience, distress, and uncertainty. That was an injustice. Ms B and her solicitor regularly contacted the Council to chase progress. The Council has offered Ms B a payment of £250 but I do not consider this is enough to acknowledge the distress and inconvenience and the Council has agreed to pay a more suitable amount, outlined below.
- Ms B had been paying building insurance premiums as part of her service charge, based on the property having two bedrooms. This was fault and the Council has offered Ms B a payment of £630 for the overpayments in building insurance she has made. I consider this is suitable to acknowledge the injustice caused by this error.
- Ms B wants the Council to refund the rent she has paid since March 2022, when the sale should have completed. The Housing Act 1985 created a legal remedy – the delay notice procedure – for tenants to use in these circumstances. The Council cannot refund rent payments unless the tenant serves an initial notice of delay (RTB6) followed by an operative notice of delay (RTB8).
- In this case, Ms B served notices of delays (RTB6) to the Council, and the Council sent her counter notices (RTB7). Ms B did not serve an RTB8 to claim a refund of the rent payments. And as Ms B used the notice of delay procedure, we would not recommend a remedy where an alternative remedy has already been sought by other means.
- Ms B wants to be in year three of the discount repayment should she decide to sell the property which is based on the date the sale should have completed; March 2022. On balance, I think it is likely the sale would have completed earlier but for any Council fault. Ms B accepted the offer in January 2022, and there would have been no question about the Council holding the correct information for the property had the Council sent a correct offer to Ms B at this time.
- The Council says it cannot backdate the completion date of the sale so it cannot alter the discount repayment period. I also do not consider it would be appropriate to recommend the Council pay the difference between year one and year three of the discount repayment period, as this would be disproportionate. However, the delay did cause distress and uncertainty to Ms B. That was an injustice. So, the Council have agreed to pay Ms B an increased symbolic payment, outlined below, to recognise this.
- Ms B says she incurred additional conveyancing fees due to the delays. The Council has asked Ms B to send it an itemised list of the additional fees so it can consider a refund. I consider this is suitable.
- The Council signposted Ms B to the Housing Ombudsman in its first stage two complaint response. The Housing Ombudsman does not have the relevant jurisdiction to decide such a complaint and the Council should have signposted Ms B to the Local Government and Social Care Ombudsman. This was fault. Ms B says she contacted the Housing Ombudsman. This was wasted time and effort, which was an injustice.
Agreed action
- To remedy the outstanding injustice caused to Ms B and the fault I have identified, the Council has agreed to take the following action within four weeks of my final decision:
- Pay Ms B an increased symbolic payment of £1,000 to acknowledge Ms B’s distress, inconvenience and uncertainty caused by the Council’s delays.
- Pay Ms B £630 for the building insurance overpayments, which it has already offered to do previously.
- Refund Ms B for the additional conveyancing fees caused by the delays on receipt of an itemised list.
- Apologise to Ms B for the delays and for signposting her to the incorrect Ombudsman. This apology should be in accordance with the Ombudsman’s new guidance Making an effective apology.
- Remind relevant staff of the importance of which Ombudsman scheme to signpost to at the conclusion of the complaints procedure. This guidance may be of assistance.
Final decision
- I have now completed my investigation and uphold Ms B’s complaint. There was fault by the Council which caused injustice to Ms B. The action it has agreed to take is sufficient to remedy that injustice.
Investigator’s decision on behalf of the Ombudsman
Investigator's decision on behalf of the Ombudsman