Peterborough City Council (16 017 557)

Category : Other Categories > Land

Decision : Upheld

Decision date : 29 Jan 2018

The Ombudsman's final decision:

Summary: The Council was at fault for the way it handled Mr B’s request to buy Council land. This caused Mr B an injustice. The Council has agreed to make a payment which will allow the sale to be completed, and also a payment to Mr B for his distress and inconvenience. This puts right the injustice suffered by Mr B. So, I have ended my investigation.

The complaint

  1. The complainant, who I will refer to as Mr B, complains about the Council’s handling of his relative’s attempted purchase of land owned by the Council. Specifically, Mr B complains that the Council:
    • delayed unreasonably in finalising the sale of the land; and
    • delayed unreasonably in dealing with his complaint about the matter.

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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. We cannot investigate late complaints unless we decide there are good reasons. Late complaints are when someone takes more than 12 months to complain to us about something a council has done. (Local Government Act 1974, sections 26B and 34D, as amended)
  3. 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 discussed the complaint with Mr B and have considered all the documents he has sent in support of his complaint. I have considered the Council’s response to our enquiries about the complaint. I have also considered the comments of Mr B and the Council in response to two draft decision statements on the complaint.

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What I found

  1. There is a long history to the issues Mr B complains about. Mr B says he first approached the Council in 2006 to enquire about purchasing the land behind his relative’s property.
  2. Mr B would like the Ombudsman to investigate all events since August 2014, when he first complained to the Council about its handling of the proposed purchase. The Ombudsman would not normally investigate a complaint when someone has taken more than 12 months to complain to the Ombudsman. Mr B complained to the Ombudsman in February 2017. I have considered Mr B’s request to investigate all events since August 2014. But, I do not consider there are good reasons to exercise the Ombudsman’s discretion to go back this far.
  3. Mr B was aware of the Ombudsman at the time and I find he could have complained to the Ombudsman earlier. But, I have exercised the Ombudsman’s discretion to investigate all events since August 2015. This was when the Council told Mr B it would consider his complaint and the ongoing land purchase separately. I find this is a suitable starting point for my investigation of both Mr B’s complaint about the Council’s handling of the land purchase and his complaint about the way the Council dealt with his complaint about the matter.

Background

  1. Mr B lives on the same road as his relative. Mr B’s relative’s property backs onto an area of open land owned by the Council. Mr B and his relative have complained to the Council for several years about anti social behaviour, drug use and fly tipping on the area of open land that has caused problems for residents. As a solution to this problem Mr B’s relative has attempted to purchase part of the land from the Council to be used as an extension to his garden. Although it is Mr B’s relative who wishes to purchase the land, it is Mr B who has been dealing with the matter and has been acting as his relative’s representative. It is also Mr B who complained to the Council, and later the Ombudsman, about the Council’s handling of the land purchase. Mr B’s relative has given consent for Mr B to complain on his behalf. So, this statement refers to Mr B’s actions rather than the actions of his relative. For clarity, I will address the two parts of Mr B’s complaint to the Ombudsman separately.
  2. In response to earlier attempts to purchase the land, the Council told Mr B he would need to apply for planning permission to re-site the existing boundary fence. Mr B received planning permission, after appealing to the Planning Inspector, in November 2014.

The Council’s handling of the land purchase

What happened

  1. My investigation has focused on Mr B’s most recent attempt to purchase the land. In September 2015 the Council told Mr B it was willing to sell a parcel of land behind his relative’s property.
  2. Mr B says during a meeting with the Council on 14 September he was told the land was worth £10,000. Mr B then put in a proposal to the Council to buy the land for this amount. The Council responded in early October by saying the land is valued at £60,000. In response, Mr B offered £15,000. The Council then responded on 14 October by saying there was an error in previous correspondence and the price is actually £56,137 for 724.31 sq.m. of land.
  3. The Council then arranged for an independent valuation of the land to be undertaken in early November. This resulted in the Council telling Mr B on 16 November that the amount now sought was £20,000. Mr B responded by saying he wanted to proceed on this basis. The Council then sent draft heads of terms for the purchase to Mr B’s solicitor. Mr B signed the draft heads of terms in December.
  4. On 11 April 2016 the Council advertised the proposed land sale in a local newspaper. Mr B says he had been asking the Council to do this for several months. In May the Council told Mr B it was considering the objections to the sale that it received. In June the Council told Mr B that once the outcome of his complaint is known, the Council would make a decision on the land sale.
  5. On 1 September Mr B had a meeting with the Council after he received the Council’s stage 3 response to his complaint. At the meeting officers told Mr B the proposed sale would not be going ahead and the Council would only be willing to sell a smaller portion of land.
  6. On 6 September an officer from the Council’s property department sent an internal email to the Director for property matters, containing advice on how the sale would proceed. This was based on selling to Mr B’s relative a piece of land of 44.18 sq.m. for an asking price of £2200. This email identified that the sale of the land would be subject to ‘clawback’ to a named public body - which means the Council would be required to pay 44% of the sale price to the public body. In total and including costs the officer estimated Mr B would normally be required to pay £4400. (The Council provided Mr B with this email in September 2017 in response to his request for certain documents held by the Council).
  7. On 1 October Mr B met with Council officers involved with the sale. The Council officers confirmed the Council would only be selling the smaller piece of land. But, the Council said due to the failings identified by the stage 3 investigation, the transfer would be at nil cost to Mr B and the Council would pay its own legal fees. Later that month the Council sent Mr B signed heads of terms for the sale of the smaller piece of land at nil cost. Mr B’s relative signed the heads of terms on 2 November. The Council sent the draft transfer to Mr B’s solicitor on 9 December and said it could not finalise the transfer because it was waiting for title details from the Land Registry. The Council says it received the title details on 15 December.
  8. On 12 January 2017 the Council contacted the public body to ask for its consent to the sale of the land because the title details state the land is subject to a clawback payment to the public body.
  9. On 23 March the public body sent an email to the Council saying that in order to have the restriction lifted, the public body would need to consider what if any financial value it has, so it would need an independent valuation. In early April the Council says it re-sent information (draft transfer, title plan and register) requested by the public body, which it had already provided.
  10. On 19 April the public body’s solicitor contacted the Council and said because the public body cannot waive its right to clawback, the public body can either:
      1. Insist on a valuation and the payment from the Council set out in the transfer, or
      2. ‘port’ the obligation onto Mr B’s relative’s title.
  11. The solicitor added that option 2 is the public body’s preferred option. The Council sent these options to Mr B’s solicitor to consider.
  12. On 10 May the public body contacted the Council saying Mr B did not want the current obligation passed onto the title. The public body asked the Council if it had an open market value for the land which the public body could potentially consider and rely on - otherwise the public body would need an external valuation.
  13. On 19 May Mr B’s solicitor contacted the Council saying that Mr B needed to know how much the clawback would be and that Mr B would rather pay this now. On 23 May Mr B asked the Council to send the Council’s valuation to the public body as the public body had advised they could use it.
  14. In early June the Council put the sale on hold because Mr B’s complaint was being investigated by the Ombudsman. We told the Council in early July that our investigation should not mean the sale is put on hold.
  15. On 13 July the public body wrote to the Council saying it could now only consent to the sale on the basis that the clawback is paid as dictated by the transfer on completion of the transfer to Mr B’s relative.
  16. On 8 September the public body contacted Mr B saying it had obtained a valuation of the land which states it is worth £11,872. The public body added that the obligation to pay the 42% clawback on this figure falls on the Council not Mr B.
  17. On 21 September the Council sent a letter to Mr B’s solicitor clarifying the Council’s position. The letter said:
    • Ordinarily the Council will pay the clawback out of the funds received from the sale. If the sale does not generate enough surplus the Council will simply not transfer the land in the first place.
    • The Council’s expectation was that the public body would accept the Council’s position and would not ask for clawback.
    • The public body has withdrawn its offer to defer the clawback until the land is sold again, and will not consent to the transfer unless it receives payment of the clawback.
    • The public body has valued the land at £11,872 and have calculated the clawback accordingly. For the matter to proceed, the public body must be paid £4,986 (42% of £11,872).
    • There is no receipt for the Council to pay the money out of, therefore the Council cannot pay it.
    • In order for the transfer to proceed Mr B [or his relative] must pay the amount that the public body has requested as clawback.
    • The Council needs confirmation that the clawback will be paid.
  18. Mr B complains about the Council’s delay concluding the proposed sale and that it will not pay the clawback required by the public body. Mr B says the Council’s handling of the sale during recent years has significantly affected his health which has deteriorated. Mr B also says the Council has caused him and his family considerable stress and the sale has taken over his life. Mr B was also concerned that the sale would not be concluded until the planning permission to re-site the fence had expired.
  19. Since I sent my first draft decision to Mr B and the Council, the public body has undertaken a new valuation of the land on the basis it is restricted to use only as garden land. This has resulted in a lower valuation of £2,871 and a lower clawback payment of £1,206 which will need to be paid to the public body for the sale to be completed. Mr B says he chased the Council for a lower clawback amount to help the Council.

Analysis

  1. The evidence strongly suggests there was fault by the Council between September 2015, when it told Mr B it was willing to sell a piece of land, until September 2016 when the Council told Mr B it would only sell him a smaller piece of land. This is because during the autumn of 2015 the Council changed its asking price for the land several times. It also seems likely there was delay by the Council after the draft heads of terms were signed in December 2015. Also, the Council decided at a late stage to only sell a small portion of land.
  2. It is not clear why the Council changed its view on the size of the area of land it was willing to sell, or why this decision was not made earlier.
  3. But, the Council then offered to sell the smaller piece of land to Mr B’s relative at nil cost and Mr B would only be required to pay his own legal fees. This offer was made in response to the findings of fault identified by the stage 3 investigation into Mr B’s complaint. This was a reasonable offer by the Council. Also, presuming the sale could proceed on this basis, I find this also put right the injustice suffered by Mr B as a result of fault by the Council between September 2015 and September 2016.
  4. However, I find there was further fault by the Council concerning its handling of the offer to sell the smaller parcel of land at nil cost and what took place afterwards. I also find that fault by the Council has directly led to the impasse between the Council and the public body, which has prevented the sale from being concluded.
  5. A Council report from 2011 referred to in the stage 3 investigation report, refers to the fact that any sale of the land would be subject to clawback to the public body. It also says the public body must agree the valuation figure. Furthermore, the Council’s own valuation of the smaller parcel of land undertaken in September 2016 identified that the land sale would be subject to clawback to the public body. So, when the Council made the offer to Mr B to sell the smaller piece of land, it should have been fully aware that such a sale would normally be subject to a clawback payment to the public body. Also, the Council should have been aware that the sale could only proceed on a nil cost basis (without the Council having to make a payment to the public body) if the public body agreed to waive the clawback payment. If not, the Council would have needed to consider how a clawback payment would be made to the public body given the Council would not be receiving any funds from the purchase. Also, the Council would have needed to liaise with the public body regarding the valuation of the land as this would affect the amount of the clawback payment to the public body.
  6. However, I have not seen any information to show the Council made any such enquiries with the public body before progressing the sale and signing heads of terms with Mr B’s relative in November 2016. This was fault.
  7. The Council first contacted the public body in January 2017 after receiving the title details for the land which stated any sale would be subject to clawback.
  8. But, the Council already had this information so the Council should have made these enquiries before receiving the title details.
  9. The public body then asked the Council in May 2017 if it had an open market valuation for the land which the public body could potentially use, otherwise it said it would need to obtain an independent valuation for the land. During the same month, Mr B asked the Council to send its valuation to the public body as the public body had told him it may be able to use the Council’s valuation. I have not seen any information to show the Council responded. Because the Council did not share its valuation with the public body, the public body obtained its own valuation of the land in September 2016. This valuation was significantly higher than the Council’s own valuation and the Council refused to pay the £4,986 clawback payment requested by the public body for the sale to proceed.
  10. I find the impasse was largely the result of fault by the Council and could have been avoided if the Council had liaised with the public body before offering the land to Mr B at nil cost. Clearly, such a sale at nil cost could only proceed with the agreement of the public body.
  11. Also, it is possible the problem created by the significant difference between the two valuations for the land could have been avoided if the Council had shared its own valuation with the public body as requested by the public body. This is because the public body may have accepted the Council’s valuation or negotiated a valuation figure with the Council. This would have meant the public body would have not needed to undertake its own valuation, which has resulted in a much larger clawback payment.
  12. I find Mr B has suffered a significant injustice as a result of fault by the Council. This is because the sale of the land has been delayed and he has been asked to pay the clawback payment to the public body. The clawback payment is the Council’s obligation, not Mr B’s. Also, it was not a feature of the Council’s offer to Mr B to sell the land at nil cost and has arisen largely due to Council fault. So, it is not reasonable for the Council to expect Mr B to make this payment in order for the sale to be completed.
  13. Also, I find Mr B has suffered distress as a result of fault by the Council. This is because Mr B suffered undue stress, inconvenience and frustration as a result of the Council’s mishandling of the purchase since September 2016 when it agreed to sell the smaller piece of land at nil cost. This delayed the purchase being concluded and there was some uncertainty about whether the matter would be resolved. Mr B has been in regular contact with the Council and the public body since September 2016 trying to get the purchase concluded. I also recognise that Mr B has significant health problems which he says have been made worse by the Council’s actions.

The Council’s handling of Mr B’s complaint

What happened

  1. Mr B first complained to the Council about its handling of earlier attempts to buy the land in August 2014.
  2. In August 2015 the Council told Mr B it would investigate his complaint at stage 3 of the Council’s complaints procedure. By this time, Mr B also complained about the Council’s delay responding to his complaint. The Council told Mr B the land sale and the complaint handling parts of the complaint would be dealt with separately. The Council allocated the stage 3 investigation to internal officers.
  3. But, there were delays by the officers asked to undertake the investigation. So, on 6 April 2016 the Council appointed an independent party, a solicitor, to conduct the stage 3 investigation.
  4. The solicitor appointed to undertake the stage 3 investigation produced their report on 31 August 2016. The stage 3 investigation investigated some matters, such as planning and anti social behaviour, which do not form part of Mr B’s complaint to the Ombudsman. Also, the investigation considered the Council’s handling of Mr B’s attempts to purchase the land before the period which is subject to my investigation. But, the solicitor made findings on the Council’s handling of the complaint, which are relevant to my investigation. The solicitor said:
    • The Council’s failure to properly investigate and determine Mr B’s complaint at an early stage did lead to delay and cause his considerable frustration. There was a failure to complete any internal investigation, neither officer allocated the investigation was an Investigator and one officer was unaware he was investigating the complaint. There was no supervision and no challenge to the lack of progress. Mr B’s complaint could and should have been addressed at the first opportunity and not confused in the ongoing negotiations with the land sale. The solicitor recommended that the Council make a payment of £500 to Mr B for the distress he suffered.
    • The solicitor also recommended a review of the Council’s complaints process and training.
  5. In response to my enquiries the Council has said that a new two stage process was implemented in July 2015, which has shortened the timescale for complaints that escalate. More recently the Council says it has identified a need for managers to attend LGO training.

Analysis

  1. As identified by the stage 3 investigation, there was clear fault in the way the Council handled Mr B’s complaint. The Council took action in response to the findings of the stage 3 investigation and offered to sell to Mr B’s relative a smaller parcel of land at nil cost.
  2. This was a suitable response and put right the injustice suffered by Mr B as a result of the Council’s delay considering his complaint. So, I have not investigated this part of Mr B’s complaint further.

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Agreed action

  1. To put right the injustice suffered by Mr B, I recommend that the Council:
    • pays the necessary clawback to the public body which will allow the sale of the land to Mr B’s relative to be completed;
    • pays Mr B a financial payment of £400 to reflect the distress and inconvenience he suffered as a result of fault by the Council; and,
    • apologises to Mr B for the fault I have identified in my investigation.
  2. The Council has agreed to my recommendations.

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Final decision

  1. The actions agreed by the Council put right the injustice suffered by Mr B. So, I have completed my investigation.

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Investigator's decision on behalf of the Ombudsman

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