Summary: The Ombudsman found no fault on Mr Y’s complaint of the Council failing to exercise discretion and waive the repayment of the housing assistance grant it gave his late mother in 2006. The Council correctly decided the grant was repayable. It also considered his challenges to its decision.

The complaint

1. Mr Y complains the Council should have exercised discretion and waived the repayment of a housing assistance grant awarded in 2006 to his late mother, which is secured in its favour against her property by way of a charge, for more than £13,000; as a result, paying this would financially damage the business he wishes to start up.

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The Ombudsman’s role and powers

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)
3. 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)

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Housing assistance grant: conditions

4. It was a condition of the grant that:

• through the grant period (10 years) the applicant or a member of family live in the dwelling as their only residence.
• conditions as to future occupation and disposal of the dwelling (10 years) apply and in the event of a breach of those conditions the grant will be repayable to the Council in accordance with the order.
• in the event of a breach of any of the conditions, the Council may demand repayment from the applicant of a sum equal to the amount of the assistance grant paid.
• the ‘grant condition period’ means the period of 10 years beginning with the certified date. The certified date means the date defined by the Council as the date on which the execution of the eligible works is completed to their satisfaction.
• should a disposal of the whole or part of the property take place within the 10-year period, the Council will require repayment of the full amount of the grant. The liability to repay is a local land charge and will bind any person who becomes the owner of the property within that period.

5. Certain disposals of the whole or part of the property are exempt from the condition about repayment. These include:

• where a person becomes the owner of the property under a will or an intestacy; and
• a disposal is made following a change in the financial circumstances of that person who would suffer financial hardship if all or part of the amount of grant was repaid.

Policy for waiving/reducing repayment of housing assistance

6. Any request for the waiving or reducing of the amount of any housing assistance grant must be made in writing and before any circumstances occur which may result in a breach of housing assistance grant conditions.
7. The criteria for waiving or reducing repayment includes:

• Financial hardship: a disposal following a change in the circumstances of the relevant person that would cause that person to suffer financial hardship if all or part of the grant assistance was repaid;
• Employment: a disposal made to enable a relevant person to seek, or take up employment, or to change the place of employment; and
• Inheritance: a disposal by a relevant person of premises to which an application for assistance grant relates where those premises were vested in that person as a person taking under a will or, on an intestacy, and where the premises continue to be occupied by a person or persons resident at the certified date.

8. To allow the Council to assess and decide whether it is appropriate to waive or reduce a repayment, it will be necessary for the applicant or relevant person to provide any supporting information, evidence, or documentation required by the Council.

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How I considered this complaint

9. I considered all the information Mr Y sent, the notes I made of our telephone conversation, and the Council’s response to my enquiries, a copy of which I sent him. I sent a copy of my draft decision to Mr Y and the Council. I considered their responses.

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What I found

10. In April 2006, Mr Y’s mother, Mrs Z, received approval for her application from the Council for a Housing Assistance Renovation Grant (the grant) for home improvements. She signed an agreement which included a condition allowing the Council to attach a 10-year charge on the property for the grant amount. The initial amount of the grant was £11,627.07 with a further £2,000 for a second grant she applied for in October. The Council registered the grant as a land charge against her house in November upon completion of the works. Mrs Z dealt with the strategic housing team.
11. In 2014, Mrs Z died leaving her house to Mr Y. He told the council tax department of his mother’s death. The Council told him the property was exempt from council tax until probate was resolved. Probate is the process of administering a dead person’s estate. The executor named in the will to administer the estate must apply for a grant of probate. This gives them legal authority to deal with the estate.
12. Due to data protection, and the need to protect personal information, the information he gave was not shared with other departments. This meant the strategic housing team did not know the property was now empty.
13. In 2016, the Council received a letter from Mr Y saying he had no intention of applying for probate or selling the property.
14. In May 2018, the council tax department sent 2 letters to Mr Y about probate. The same year, the strategic housing team reached a ‘data sharing agreement’ with the council tax department allowing it to view information about liable persons. It was only in August the strategic housing team became aware of his mother’s death.
15. In October, the department confirmed Mr Y had not applied for, or been granted, probate. The same month, the strategic housing team wrote to Mr Y saying the grant was now repayable as the person who took out the grant, or family members, no longer lived in the property within the 10-year condition period. The amount demanded was £13,692.28. Mr Y claimed he was unaware of the charge and the Council had failed to tell him about it earlier.
16. Mr Y was unhappy with the demand. In February 2019, officers met him to discuss the charge’s repayment. They gave him a copy of the grant documents along with its waiver and reduction policy as Mr Y did not consider it repayable either in whole or in part. When it received his request, the Council gave him further time to provide information and evidence in support. During the appeal process, Mr Y offered to repay 20% of the charge as his mother died 8 years in to the 10-year period. He argued this a fair amount because the quality of the works was poor.
17. Mr Y failed to provide evidence in support of his request. The Council refused it and Mr Y appealed. He again refused to provide evidence in support of it. The Council rejected his appeal.

Analysis

18. I found no fault on this complaint and in reaching this conclusion, note the following:
1. The Council was under no obligation to tell Mr Y of the grant his mother took out while she was alive. This was strictly a matter between her and the Council. If she wanted to tell Mr Y about it, this was a decision for her to make.
2. In 2014, Mrs Z died leaving the property to Mr Y under her will. She named Mr Y as the sole executor and beneficiary. Mr Y needed a grant of probate to deal with his mother’s estate, which included proving his right to her house. Mr Y failed apply for probate.
3. I consider this was an important failure as the following consequences flowed from it:

• While he was entitled to the property under his mother’s will, he failed to get probate which would have given him legal authority to transfer it in to his name. There was arguably no ‘disposal’ of the property to Mr Y. This meant the Council could not apply for the exemption for disposals taking place under a will.
• Unless he could provide evidence showing one of the other exemptions applied, the condition about either the applicant (Mrs Z) or a family member remaining resident in the property for 10 years became highly relevant.
• He did not become aware of the Council’s charge attached to the property until after the 10-year period had passed. Had he obtained probate and transferred the property in to his name, Mr Y and his solicitors would have become aware of the charge sooner. This in turn would alert him not only to the charge itself, but the conditions his mother agreed when accepting the grant and the residency requirement. While the Council accepted it gave up to 6 months’ grace to get probate dealt with, the property remained unoccupied for more than 2 years.
• It meant the only way the Council could waive or reduce repayment of the charge was if Mr Y could successfully argue one of its 8 grounds for appealing the charge applied.
4. When he appealed, the Council agreed to consider the grounds Mr Y put forward which included financial hardship, employment, health and well-being, and inheritance. The Council asked him to provide evidence of the financial hardship repayment would cause. It asked for recent bank statements, monthly income, benefits, details of any properties owned, and details of mortgages, loans, and savings (financial hardship ground). It asked for details of unemployment dates and evidence of redundancy payments (employment ground). It asked for details of his physical and mental health (health and well-being ground), and as the executor of the estate, a breakdown of assets and debts with supporting documentation (inheritance ground).
5. Mr Y replied saying sending the requested information would not benefit him. As such, he would not waste his time doing so. He did not wish to be means tested. He confirmed he had 6 bank accounts, owned 2 properties, which included this one, and refused to send details of any mortgage, loans, or savings. He claimed becoming unemployed caused him stress and anxiety.
6. I am satisfied Mr Y had the opportunity to provide the financial information the Council asked him for to allow it to properly consider his appeal. He refused to send it. The Council refused his request for a waiver or reduction. In response to the ground about inheritance, it pointed out there was also a condition which said the applicant or family members agreed to continue to occupy the property for the 10-year period.
7. Mr Y appealed this refusal on the grounds of financial hardship and employment. Again, the Council asked him to provide evidence in support and again he refused to provide it. The Council refused his appeal. It again explained the inheritance ground saying where a change of ownership took place through a will or intestacy, the grant conditions are not considered breached.

19. Put simply, the charge would not have been repayable had Mr Y applied for probate and transferred it promptly in to his name after his mother’s death. This is because it would have been an exempt disposal. As he failed to do this, the condition about the 10-year residency applied. This condition was breached as between 2014 and 2016, the property remained unoccupied.

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Final decision

20. The Ombudsman found no fault on Mr Y’s complaint against the Council.

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Investigator's decision on behalf of the Ombudsman