Knowsley Metropolitan Borough Council (17 017 248)

Category : Housing > Other

Decision : Not upheld

Decision date : 30 Jul 2018

The Ombudsman's final decision:

Summary: there was no fault in the way the Council considered Mrs X’s appeal against its decision to seek repayment of a Renovation Grant paid to her father.

The complaint

  1. Mrs X and her brother are the executors and beneficiaries of their late father’s estate.
  2. They complain about the way the Council considered their appeal against a decision to require repayment of a Renovation Grant awarded to her late father, Mr Y, because one of the grant conditions was breached.

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The Ombudsman’s role and powers

  1. 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)
  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 Mrs X and considered all the documents she provided with her complaint. I have considered the Council’s reply to my enquiries and the grants policy in force at the relevant time. I have read Mrs X’s appeal statements and the Council’s responses.
  2. I have written to Mrs X and the Council with my draft decision and considered their comments.

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What I found

  1. The Regulatory Reform (Housing Assistance) (England and Wales) Order gives councils the discretionary power to provide financial and practical help for the repair, improvement and adaptation of homes.
  1. The Order requires councils to:
    • give the prospective grant recipient a written statement of the terms and conditions under which any help will be given;
    • ensure the recipient has received appropriate advice and information about any obligations they will have to fulfil if they receive help from the council.
  2. Councils may attach conditions to the grant. They must produce and publish a policy setting out what discretionary help they will give, who is eligible for assistance, how to apply, what information is available and how to make a complaint.

The Council’s grants policy

  1. The Council adopted a new housing renewal policy in May 2003. This policy was in force at the time it approved Mr Y’s application for a Renovation Grant.
  2. The policy imposed certain conditions on Renovation Grants which applied for a period of ten years from the date the Council certified the grant works had been satisfactorily completed. I shall refer to this as the “certified date”.
  3. One condition required repayment of the grant to the Council if the property was sold or disposed of within ten years of the certified date. There are some exempted disposals set out in the policy none of which apply in this case.
  4. Another grant condition requires the grant recipient, or a family member, to occupy the property as his or her home for a period of ten years from the certified date. This is referred to as the “occupation condition”.
  5. The grant conditions are registered as a local land charge and apply to the grant recipient and any future owner of the property.
  6. The policy includes a two-stage appeals procedure if the grant recipient (or his or her personal representative) wishes to challenge any decision, including repayment of the grant.

What happened?

  1. Mr X applied for a Renovation Grant to carry out structural repairs to his home on 9 March 2004. Mr Y was in his late seventies at the time. He and his wife owned the property.
  2. A grant officer visited Mr X at home to complete the forms. Mr X signed a Certificate of Future Occupation. By signing the form, he confirmed he had a legal interest in the property as an owner. The form also included the following statement:

“I hereby certify that:

2. I intend that throughout the Housing Assistance grant period (10 years) or a member of my family intend to live in the dwelling as my (or that member’s) only residence”.

3. I understand that if a Housing Assistance grant is approved, conditions as to future occupation and disposal of the dwelling (10 years) will apply and that in the event of a breach of those conditions, the grant will be repayable to the local authority in accordance with the policy.”

  1. Mr X also signed a grant application form during the officer’s visit. One of the statements on the form was:
  2. “I confirm I have lived and owned the dwelling for which I am applying for grants assistance for a minimum of 3 years and understand there are 10 year conditions as to repayment of grant should a breach occur….”
  3. Mrs X says her father was not given a copy of the certificate of future occupation or the grant application form. She did not find them with his documents when she later administered his estate.
  4. After the Council decided to seek repayment of the grant, Mrs X expressed some doubts about whether her father had mental capacity to understand the grant conditions when he signed the forms in 2004. She says he was elderly and had many serious medical conditions. He had suffered a stroke in 2005 and had a heart condition. She did not think he could reasonably be expected to remember all the grant conditions without being given a copy of the forms. In late 2014 he was diagnosed with a form of dementia that could have affected his mental capacity some years earlier.
  5. The law presumes that someone has capacity to make a decision unless there is evidence to the contrary. The Council says there is nothing in the records to indicate Mr X lacked capacity at the time he made the grant application and signed the forms. The diagnosis of dementia was not made until ten years later. It could not assume he lacked capacity simply because he was elderly and had multiple medical conditions.
  6. In September 2005 the Council approved Mr Y’s application for a Renovation Grant. The original grant was £22,658.29 but a further £2,905.18 was approved in March 2006 for extra unforeseen works. The total paid was £25,563.17.
  7. The Council sent Mr Y a letter and grant approval notice in September 2005 and again in March 2006 when the additional grant was approved. Both letters stated that the grant approval notice and information about the grant conditions were enclosed.
  8. Mrs X sent me the grant approval notices which she found with her father’s documents. They confirm the amount of the grant and the eligible grant works. They also state:
    • “As from the date certified by the Council as being the date on which the dwelling becomes fit for occupation the 10 year grant conditions as to repayment on disposal and occupation condition become operative for the stated period (10 years). Details of the conditions are attached.”
  9. I asked the Council whether the grant conditions were printed on the reverse of the approval notices. It told me the information was in a set of pre-printed forms included in a pack officers enclosed with the grant approval notices. It was normal practice for officers to prepare the pack and send it to grant applicants when the grant was approved.
  10. The Council sent me a copy of the grant condition notices it says were included in the pack sent to Mr Y. They explain the grant condition period runs for 10 years from the date the Council certifies that the grant works are satisfactorily completed. They also explain the grant condition that the applicant, or a family member, must live in the property as their only residence throughout the 10 year period. It says the Council may require repayment of the grant if there is a breach of the conditions relating to disposal or future occupation of the property.
  11. A separate form explains the rules about repayment of the grant and exempt disposals. It also set out the circumstances in which the Council may decide to exercise discretion not to demand repayment of the grant when the property is disposed of within 10 years.
  12. Mrs X says she did not find these forms with Mr Y’s other papers. She said he was meticulous about keeping important documents so she does not believe he would have disposed of them. She believes the Council did not send them with the approval notices.
  13. Mr X informed the grants team that the works were completed in March 2006. On 14 July 2006 the Council entered the grant conditions as a charge on the Local Land Charges register. The certified date for completion of the grant works was 22 June 2006. So, the 10 year grant condition period ran from then until 22 June 2016.
  14. Mrs X’s mother passed away in March 2006. Mr Y’s health deteriorated but he continued to live at home with support from his family and carers for several years. He was later admitted to hospital where he passed away in February 2015.
  15. The property was unoccupied following Mr Y’s death. Probate was granted on 29 May 2015. Mrs X informed the Council Tax office in April 2015 that Mr Y had passed away and a Council Tax exemption was awarded pending the grant of probate.
  16. After the grant of probate, the property remained unoccupied. Mrs X says Mr Y had told her and her brother about the Renovation Grant and the 10 year condition relating to disposal of the property. But he did not mention any further condition requiring him or a family member to occupy the property for 10 years. She first found out about this grant condition in March 2017 when they were selling the house. If she had known about the occupation condition, her daughter would have moved into the property after Mr Y passed away to ensure they complied with it.
  17. Mrs X and her brother decided to sell the late Mr Y’s home after they carried out some works to modernise the property. The property was put on the market and potential buyers were found. During the conveyancing process, the buyer’s solicitor noted the local land charge entry and contacted the Council to ask if could be removed. The Council explained one of the grant conditions may not have been met and the charge could not be removed without first making further enquiries. The buyer’s solicitor informed the solicitor who was acting for Mrs Y and her brother. The Council had checked the Council Tax records which showed the property was unoccupied from 30 May 2015 (the day after probate was granted) until 22 June 2016 (the date when the 10 year grant condition period expired). Mrs X says these dates are correct.
  18. Mrs X and her brother met an officer from the grants team on 21 March 2017. He explained the grant condition relating to occupation of the property had been breached. He gave them a copy of the grant condition forms and the certificate of future occupation Mr Y signed when he made the application in March 2004. Mrs X says this is the first time she had seen this information and found out about the occupation condition.
  19. Mrs X and her brother decided to appeal against the Council’s decision to require repayment of the grant. They completed the first stage appeal form on 21 March 2017. The form included guidance about the Council’s policy for waiving or reducing a grant repayment. It said an appeal could be made on the following grounds:
    • financial hardship (repayment of the grant would cause financial hardship);
    • employment (need to sell property to seek or take up employment);
    • health and wellbeing (need to sell due to the physical or mental health of the relevant person);
    • provision of care (need to move to give or provide care due to disability or infirmity);
    • overcrowding (need to move to a large property to meet needs of household);
    • proceeds of sale are less than amount of grant due to be repaid;
    • property is sold to a local authority or registered provider of social housing;
    • property sold by someone who inherits the property and the property was still occupied at the certified date
  20. On the appeal form Mrs X and her brother explained the sequence of events since Mr Y’s death and provided supporting evidence. She says they first discovered there was an occupation condition attached to the grant when they met a Council officer on 21 March 2017. She said the Council had admitted her father did not receive a copy of the documents he had signed when he made the grant application. She said if they had been aware of the occupation condition, they would have complied with it or contacted the Council to seek advice. Mrs X did not specifically mention any of the listed appeal criteria. She sent in additional evidence about her late father’s medical condition in May 2017.
  21. A manager in the Strategic Housing Service considered the appeal and all the documents. He sent a detailed response on 11 July. He concluded that the grant condition relating to occupation of the property had been breached. He then went on to consider whether the Council should exercise discretion to waive repayment of the grant. He noted that Mrs Y and her brother had not appealed on any of the listed grounds but nevertheless considered the matters they raised on their merits.
  22. He considered the medical evidence about Mr Y. He said it did not indicate Mr Y had a mental health condition that may have affected his mental capacity when he signed the grant forms in 2004. He suggested family members could have made enquiries to the Council about the grant conditions. He was satisfied Mr Y was given sufficient information about the grant conditions and the circumstances in which it had to be repaid. He said it was a matter for Mr Y to decide what information to share with his relatives. He acknowledged that the Council Tax service was informed about Mr Y’s death and the fact that the property was empty. But that information had not been shared with Strategic Housing services, who deal with grant applications, for data protection reasons. He said a copy of the grant approval and grant condition notices were sent to Mr Y. These clearly stated there was a ten year condition relating to disposal and future occupation of the property. He explained there was a right to make a further appeal to a senior manager.
  23. Mrs X and her brother submitted a further appeal on in August 2017. They said that as Mr Y did not tell them about the occupation condition they could only conclude he had not understood it. They pointed out the application forms were completed by the grants officer and Mr Y had simply signed them. They say Mr Y did not get any information in writing to explain the extent of his obligations and the rules about grant repayment. If the Council had sent him a copy of the forms he signed, the executors would have known about the full grant conditions. Instead they were only informed about the occupation condition after the breach had occurred. They suggested Mr Y’s actions could have been affected by undiagnosed dementia and the stress of coping with his wife’s ill health at the time he signed the forms. They said the Council could not reasonably expect the executors to make enquiries about a grant condition of which they were unaware. They only knew about the grant condition relating to the sale of the property.
  24. A senior manager replied to the second stage appeal in October 2017. He decided the evidence Mrs Y and her brother had submitted was not sufficient to justify waiving the repayment. He had considered the medical evidence about Mr Y’s health. He said it did not indicate that Mr Y had been diagnosed with any mental health condition which would have affected his capacity to retain information at the time he signed the grant forms. He said the facts were that the property was unoccupied before 22 June 2016 and so the occupation condition had been breached. He explained that the Council retained the grant application forms and sent Mr Y the grant approval notice with a copy of the grant conditions before the works started. Any delay in removing the local land charge after June 2016 had not affected subsequent events or the outcome. Before removing the charge, the Council would still have carried out checks which would have revealed that the occupation condition was breached during the ten year period. The manager explained their right to make a complaint to the Ombudsman if they were not satisfied with his response.
  25. While the Council was considering the appeal, it presented Mrs Y and her brother with two options. The family could suspend the sale of the property pending the outcome of the appeal or it could repay the grant and it would be held in a suspense account pending the appeal outcome. The solicitor acting for Mrs Y and her brother said they wanted to take the second option so the sale would not fall through.
  26. Mrs Y and her brother complained to the Ombudsman in February 2018. They reiterated some of the key points of their appeal. They felt they were forced to repay the grant so they could proceed with the sale of the property. They felt they would not have been put in this situation if the Council had given Mr Y a copy of the forms he signed. If that had happened, they would then have known about all the grant conditions. They say repaying the grant accounts for one third of the proceeds of the sale.

Analysis

  1. On the facts, the grant condition requiring the property to be occupied by Mr Y or a family member for ten years from 22 June 2006 was breached. This condition expired on 22 June 2016 and the property was left unoccupied after probate was granted on 29 May 2015. The Council therefore correctly decided there was a breach of condition.
  2. Mrs X is concerned that Mr Y may have lacked capacity to make the grant application in 2004. She first raised these concerns in 2017 when the Council sought repayment of the grant. Mr X managed his own financial affairs and property in 2004 and nobody had power of attorney. The Council properly considered the medical evidence Mrs X submitted. It concluded Mr Y did not have a diagnosed mental health condition that would have affected his mental capacity at the time he made the grant application and signed the forms. It could not assume from the fact Mr Y was diagnosed with dementia in late 2014 that he already had this condition and lacked mental capacity when he signed the grant forms in 2004.
  3. I have considered whether the Council gave Mr Y sufficient information about the terms and conditions for the grant. I would not expect the Council to give the applicant a copy of the application form and future occupation certificate unless this was requested. At this stage, it is purely an application for assistance and the grant may or may not be approved. However, it is important for applicants to be given written information about the grant conditions and repayment at the approval stage before they decide whether to accept the grant offer and proceed with the works.
  4. The Council says it enclosed a pack of information with the approval notices it sent to Mr Y which clearly explained the grant conditions and repayment rules. It has provided a specimen copy of this information which contains sufficiently detailed information. The covering letters sent to Mr Y also refer to enclosed information. Mrs X believes her father did not receive this information because it was not kept with the grant approval notices in the box where he kept important documents.
  5. There is insufficient evidence for me to make a finding about whether the Council failed to send Mr Y this information with the grant approval notices. The forms were standard pre-printed documents sent as part of an information pack. A copy of standard information sheets would not be put in the applicant’s case records. Mrs X says Mr Y always kept important documents together in one place. However, they could have become separated or may not have been kept. I do not consider further enquiries will provide any conclusive evidence because the application was made more than ten years ago.
  6. It is important to note that the wording on the grant approval notices, which Mrs X confirms Mr Y did receive, refer to more than one grant condition. It mentions a disposal condition and an occupation condition and says more detailed information was attached. If that information was not with Mr Y’s papers, the executors could have made enquiries to the Council to ensure they fully understood all the grant conditions before deciding what to do with the property. Instead they relied on the information Mr Y had given them before he passed away that there was only one grant condition relating to disposal of the property. Given the significant amount of the grant, it would have been prudent to check the grant conditions with the Council.
  7. I see no evidence of fault in the way the Council considered the appeal at both stages of its appeals procedure. The officers considered all the evidence Mrs X and her brother submitted. They correctly concluded there had been a breach of the occupation condition. They then went on to examine the circumstances and supporting evidence to decide if they were sufficiently compelling to exercise discretion and waive repayment of the grant. They decided not to do so. That is a decision the Council was entitled to make and the Ombudsman cannot criticise a decision which was properly made because Mrs X disagrees with it.

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Final decision

  1. I found no evidence of fault in the way the Council considered Mrs X’s appeal against its decision to seek repayment of the grant.

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Investigator's decision on behalf of the Ombudsman

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